Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | STARWOOD PROPERTY TRUST, INC. | |
Entity Central Index Key | 1465128 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 238,126,915 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets: | ||
Cash and cash equivalents | $360,720 | $255,187 |
Restricted cash | 39,568 | 48,704 |
Loans held-for-investment, net | 6,040,825 | 5,779,238 |
Loans held-for-sale, at fair value | 343,770 | 391,620 |
Loans transferred as secured borrowings | 95,000 | 129,427 |
Investment securities ($519,625 and $556,253 held at fair value) | 1,021,311 | 998,248 |
Intangible assets—servicing rights ($130,761 and $132,303 held at fair value) | 138,802 | 144,152 |
Investment in unconsolidated entities | 209,833 | 193,983 |
Goodwill | 140,437 | 140,437 |
Derivative assets | 58,601 | 26,628 |
Accrued interest receivable | 39,121 | 40,102 |
Other assets | 128,848 | 135,506 |
Variable interest entity ("VIE") assets, at fair value | 103,363,978 | 107,816,065 |
Total Assets | 111,980,814 | 116,099,297 |
Liabilities: | ||
Accounts payable, accrued expenses and other liabilities | 112,954 | 144,516 |
Related-party payable | 27,673 | 40,751 |
Dividends payable | 108,435 | 108,189 |
Derivative liabilities | 11,945 | 5,476 |
Secured financing agreements, net | 3,711,834 | 3,137,789 |
Convertible senior notes, net | 1,324,125 | 1,418,022 |
Secured borrowings on transferred loans | 95,000 | 129,441 |
VIE liabilities, at fair value | 102,708,732 | 107,232,201 |
Total Liabilities | 108,100,698 | 112,216,385 |
Commitments and contingencies (Note 20) | ||
Starwood Property Trust, Inc. Stockholders' Equity: | ||
Preferred stock, $0.01 per share, 100,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.01 per share, 500,000,000 shares authorized, 225,550,418 issued and 224,336,668 outstanding as of March 31, 2015 and 224,752,053 issued and 223,538,303 outstanding as of December 31, 2014 | 2,255 | 2,248 |
Additional paid-in capital | 3,837,040 | 3,835,725 |
Treasury stock (1,213,750 shares) | -23,635 | -23,635 |
Accumulated other comprehensive income | 39,362 | 55,896 |
Retained earnings (accumulated deficit) | 2,550 | -9,378 |
Total Starwood Property Trust, Inc. Stockholders' Equity | 3,857,572 | 3,860,856 |
Non-controlling interests in consolidated subsidiaries | 22,544 | 22,056 |
Total Equity | 3,880,116 | 3,882,912 |
Total Liabilities and Equity | $111,980,814 | $116,099,297 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ||
Investment securities held at fair value | $519,625 | $556,253 |
Intangible assets - servicing rights held at fair value | $130,761 | $132,303 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 225,550,418 | 224,752,053 |
Common stock, shares outstanding | 224,336,668 | 223,538,303 |
Treasury stock, shares | 1,213,750 | 1,213,750 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 |
Revenues: | |
Interest income from loans | $104,910 |
Interest income from investment securities | 29,454 |
Servicing fees | 34,211 |
Other revenues | 3,404 |
Total revenues | 171,979 |
Costs and expenses: | |
Management fees | 27,821 |
Interest expense | 37,831 |
General and administrative | 46,101 |
Acquisition and investment pursuit costs | 394 |
Depreciation and amortization | 4,636 |
Loan loss allowance, net | 497 |
Other expense | 1,689 |
Total costs and expenses | 118,969 |
Income before other income, income taxes and non-controlling interests | 53,010 |
Other income: | |
Income of consolidated VIEs, net | 56,004 |
Change in fair value of servicing rights | -5,251 |
Change in fair value of investment securities, net | 8,361 |
Change in fair value of mortgage loans held-for-sale, net | 20,893 |
Earnings from unconsolidated entities | 64 |
Gain on sale of investments and other assets, net | 1,555 |
Gain (loss) on derivative financial instruments, net | -7,866 |
Foreign currency (loss) gain, net | 1,477 |
Total other-than-temporary impairment ("OTTI") | -1,192 |
Noncredit portion of OTTI recognized in other comprehensive income | 979 |
Net impairment losses recognized in earnings | -213 |
Other income, net | 18 |
Total other income | 75,042 |
Income from continuing operations before income taxes | 128,052 |
Income tax provision | -5,620 |
Income from continuing operations | 122,432 |
Loss from discontinued operations, net of tax (Note 3) | -1,551 |
Net income | 120,881 |
Net income attributable to non-controlling interests | -280 |
Net income (loss) attributable to Starwood Property Trust, Inc. | $120,601 |
Basic: | |
Income from continuing operations (in dollars per share) | $0.62 |
Loss from discontinued operations (in dollars per share) | ($0.01) |
Net income (in dollars per share) | $0.61 |
Diluted: | |
Income from continuing operations (in dollars per share) | $0.61 |
Loss from discontinued operations (in dollars per share) | ($0.01) |
Net income (in dollars per share) | $0.60 |
Dividends declared per common share (in dollars per share) | $0.48 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Consolidated Statements of Comprehensive Income | ||
Net income | $120,779 | $120,881 |
Other comprehensive (loss) income (net change by component): | ||
Cash flow hedges | -263 | 122 |
Available-for-sale securities | -7,963 | 3,498 |
Foreign currency remeasurement | -8,308 | 1,046 |
Other comprehensive (loss) income | -16,534 | 4,666 |
Comprehensive income | 104,245 | 125,547 |
Less: Comprehensive income attributable to non-controlling interests | -416 | -280 |
Comprehensive income attributable to Starwood Property Trust, Inc. | $103,829 | $125,267 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Equity (USD $) | Total Starwood Property Trust, Inc. Stockholders' Equity | Common stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interests | Total |
In Thousands, except Share data, unless otherwise specified | ||||||||
Balance at Dec. 31, 2013 | $4,282,528 | $1,961 | $4,300,479 | ($10,642) | ($84,719) | $75,449 | $44,605 | $4,327,133 |
Balance (in shares) at Dec. 31, 2013 | 196,139,045 | 625,850 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Share-based compensation | 7,207 | 4 | 7,203 | 7,207 | ||||
Share-based compensation (in shares) | 434,189 | |||||||
Manager incentive fee paid in stock | 3,308 | 2 | 3,306 | 3,308 | ||||
Manager incentive fee paid in stock (in shares) | 138,288 | |||||||
Net income | 120,601 | 120,601 | 280 | 120,881 | ||||
Dividends declared, $0.48 per share | -95,424 | -95,424 | -95,424 | |||||
Spin-off of Starwood Waypoint Residential Trust | -1,118,743 | -1,118,743 | -1,594 | -1,120,337 | ||||
Other comprehensive income (loss), net | 4,666 | 4,666 | 4,666 | |||||
Distribution to non-controlling interests | -31,787 | -31,787 | ||||||
Balance at Mar. 31, 2014 | 3,204,143 | 1,967 | 3,192,245 | -10,642 | -59,542 | 80,115 | 11,504 | 3,215,647 |
Balance (in shares) at Mar. 31, 2014 | 196,711,522 | 625,850 | ||||||
Balance at Dec. 31, 2014 | 3,860,856 | 2,248 | 3,835,725 | -23,635 | -9,378 | 55,896 | 22,056 | 3,882,912 |
Balance (in shares) at Dec. 31, 2014 | 224,752,053 | 1,213,750 | 224,752,053 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Proceeds from DRIP Plan | 55 | 55 | 55 | |||||
Proceeds from DRIP Plan (in shares) | 2,303 | |||||||
Convertible Senior Notes repurchased | -15,669 | -15,669 | -15,669 | |||||
Share-based compensation | 7,491 | 4 | 7,487 | 7,491 | ||||
Share-based compensation (in shares) | 408,763 | |||||||
Manager incentive fee paid in stock | 9,445 | 3 | 9,442 | 9,445 | ||||
Manager incentive fee paid in stock (in shares) | 387,299 | |||||||
Net income | 120,363 | 120,363 | 416 | 120,779 | ||||
Dividends declared, $0.48 per share | -108,435 | -108,435 | -108,435 | |||||
Other comprehensive income (loss), net | -16,534 | -16,534 | -16,534 | |||||
VIE non-controlling interests | 431 | 431 | ||||||
Distribution to non-controlling interests | -359 | -359 | ||||||
Balance at Mar. 31, 2015 | $3,857,572 | $2,255 | $3,837,040 | ($23,635) | $2,550 | $39,362 | $22,544 | $3,880,116 |
Balance (in shares) at Mar. 31, 2015 | 225,550,418 | 1,213,750 | 225,550,418 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Equity (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Consolidated Statements of Equity | ||
Dividends declared per common share (in dollars per share) | $0.48 | $0.48 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flows from Operating Activities: | ||
Net income | $120,779 | $120,881 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred financing costs | 3,510 | 2,895 |
Amortization of convertible debt discount and deferred fees | 5,363 | 2,988 |
Accretion of net discount on investment securities | -10,603 | -7,398 |
Accretion of net deferred loan fees and discounts | -10,179 | -1,806 |
Amortization of net premium (discount) from secured borrowings on transferred loans | 4 | -787 |
Share-based compensation | 7,491 | 7,207 |
Share-based component of incentive fees | 9,445 | 3,308 |
Change in fair value of fair value option investment securities | 499 | -8,361 |
Change in fair value of consolidated VIEs | -5,657 | -21,877 |
Change in fair value of servicing rights | 1,542 | 5,251 |
Change in fair value of loans held-for-sale | -21,131 | -20,893 |
Change in fair value of derivatives | -26,724 | 7,110 |
Foreign currency loss (gain), net | 30,416 | -1,492 |
Gain on sale of investments and other assets | -17,198 | -2,498 |
Other-than-temporary impairment | 213 | |
Loan loss allowance, net | 317 | 497 |
Depreciation and amortization | 3,692 | 5,786 |
Earnings from unconsolidated entities | -6,090 | -64 |
Distributions of earnings from unconsolidated entities | 7,030 | 956 |
Loss on extinguishment of debt | 5,292 | |
Originations of loans held-for-sale, net of principal collections | -413,027 | -261,733 |
Proceeds from sale of loans held-for-sale | 482,009 | 302,461 |
Changes in operating assets and liabilities: | ||
Related-party payable, net | -13,078 | 11,665 |
Accrued and capitalized interest receivable, less purchased interest | -17,341 | 3,063 |
Other assets | 1,067 | -20,474 |
Accounts payable, accrued expenses and other liabilities | -23,282 | -22,574 |
Net cash provided by operating activities | 114,146 | 104,324 |
Cash Flows from Investing Activities: | ||
Origination and purchase of loans held-for-investment | -649,886 | -728,594 |
Proceeds from principal collections on loans | 285,741 | 316,428 |
Proceeds from loans sold | 85,121 | 146,400 |
Purchase of investment securities | -67,247 | -9,890 |
Proceeds from sales of investment securities | 4,713 | 27,883 |
Proceeds from principal collections on investment securities | 11,737 | 8,227 |
Deposit on property acquisition | -18,178 | |
Proceeds from sale of properties | 33,056 | 1,784 |
Purchase of other assets | -435 | |
Investment in unconsolidated entities | -28,041 | |
Distribution of capital from unconsolidated entities | 11,296 | 17,834 |
Payments for purchase or termination of derivatives | -6,117 | -11,274 |
Proceeds from termination of derivatives | 6,988 | 799 |
Return of investment basis in purchased derivative asset | 90 | 407 |
Decrease in restricted cash, net | 5,326 | 234 |
Spin-off of Starwood Waypoint Residential Trust | -111,960 | |
Acquisition and improvement of single family homes | -61,901 | |
Proceeds from sale of non-performing loans | 1,153 | |
Net cash used in investing activities | -325,836 | -402,470 |
Cash Flows from Financing Activities: | ||
Borrowings under financing agreements | 1,320,732 | 997,767 |
Principal repayments and repurchases on borrowings | -847,288 | -656,573 |
Payment of deferred financing costs | -1,263 | -7,418 |
Proceeds from common stock issuances | 55 | |
Payment of dividends | -108,189 | -90,171 |
Distributions to non-controlling interests | -359 | -31,788 |
Issuance of debt of consolidated VIEs | 6,763 | 45,761 |
Repayment of debt of consolidated VIEs | -51,538 | -53,385 |
Distributions of cash from consolidated VIEs | 3,790 | 2,740 |
Net cash provided by financing activities | 322,703 | 206,933 |
Net increase (decrease) in cash and cash equivalents | 111,013 | -91,213 |
Cash and cash equivalents, beginning of period | 255,187 | 317,627 |
Effect of exchange rate changes on cash | -5,480 | 57 |
Cash and cash equivalents, end of year | 360,720 | 226,471 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 48,448 | 44,638 |
Income taxes paid | 2,903 | 2,725 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Net assets distributed in spin-off of Starwood Waypoint Residential Trust | 1,008,377 | |
Dividends declared, but not yet paid | 108,435 | 95,424 |
Consolidation of VIEs (VIE asset/liability additions) | 4,413,608 | 20,236,513 |
Deconsolidation of VIEs (VIE asset/liability reductions) | $17,841 | $1,289,569 |
Business_and_Organization
Business and Organization | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Business and Organization | ||||
Business and Organization | 1. Business and Organization | |||
Starwood Property Trust, Inc. (“STWD” together with its subsidiaries, “we” or the “Company”) is a Maryland corporation that commenced operations in August 2009, upon the completion of our initial public offering (“IPO”). We are focused primarily on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt investments, commercial mortgage-backed securities (“CMBS”), and other commercial real estate-related debt investments in both the U.S. and Europe. We refer to the following as our target assets: | ||||
· | commercial real estate mortgage loans, including preferred equity interests; | |||
· | CMBS; and | |||
· | other commercial real estate-related debt investments. | |||
Our target assets may also include residential mortgage-backed securities (“RMBS”), certain residential mortgage loans, distressed or non-performing commercial loans, commercial properties subject to net leases and equity interests in commercial real estate. As market conditions change over time, we may adjust our strategy to take advantage of changes in interest rates and credit spreads as well as economic and credit conditions. | ||||
We have two reportable business segments as of March 31, 2015: | ||||
· | Real estate lending (the “Lending Segment”)—engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, CMBS, RMBS and other real estate and real estate-related debt investments in both the U.S. and Europe that are held-for-investment. | |||
· | Real estate investing and servicing (the “Investing and Servicing Segment”)—includes (i) servicing businesses in both the U.S. and Europe that manage and work out problem assets, (ii) an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, including subordinated interests of securitization and resecuritization transactions, (iii) a mortgage loan business which originates conduit loans for the primary purpose of selling these loans into securitization transactions; and (iv) an investment business that selectively acquires commercial real estate assets. This segment excludes the consolidation of securitization variable interest entities (“VIEs”). | |||
On January 31, 2014, we completed the spin-off of our former single family residential (“SFR”) segment to our stockholders. The newly-formed real estate investment trust, Starwood Waypoint Residential Trust (“SWAY”), is listed on the New York Stock Exchange (“NYSE”) and trades under the ticker symbol “SWAY.” Our stockholders received one common share of SWAY for every five shares of our common stock held at the close of business on January 24, 2014. As part of the spin-off, we contributed $100 million to the unlevered balance sheet of SWAY to fund its growth and operations. As of January 31, 2014, SWAY held net assets of $1.1 billion. The net assets of SWAY consisted of approximately 7,200 units of single-family homes and residential non-performing mortgage loans as of January 31, 2014. In connection with the spin-off, 40.1 million shares of SWAY were issued. Refer to Note 3 herein for additional information regarding SFR segment financial information, which has been presented within discontinued operations in the condensed consolidated statements of operations included herein. | ||||
We are organized and conduct our operations to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). As such, we will generally not be subject to U.S. federal corporate income tax on that portion of our net income that is distributed to stockholders if we distribute at least 90% of our taxable income to our stockholders by prescribed dates and comply with various other requirements. | ||||
We are organized as a holding company and conduct our business primarily through our various wholly-owned subsidiaries. We are externally managed and advised by SPT Management, LLC (our “Manager”) pursuant to the terms of a management agreement. Our Manager is controlled by Barry Sternlicht, our Chairman and Chief Executive Officer. Our Manager is an affiliate of Starwood Capital Group, a privately-held private equity firm founded and controlled by Mr. Sternlicht. | ||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies |
Balance Sheet Presentation of the Investing and Servicing Segment’s Variable Interest Entities | |
As noted above, the Investing and Servicing Segment operates an investment business that acquires unrated, investment grade and non-investment grade rated CMBS. These securities represent interests in securitization structures (commonly referred to as special purpose entities, or “SPEs”). These SPEs are structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to the certificate holders. Under accounting principles generally accepted in the United States of America (“GAAP”), SPEs typically qualify as variable interest entities (“VIEs”). These are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. | |
Because the Investing and Servicing Segment often serves as the special servicer of the trusts in which it invests, consolidation of these structures is required pursuant to GAAP as outlined in detail below. This results in a consolidated balance sheet which presents the gross assets and liabilities of the VIEs. The assets and other instruments held by these VIEs are restricted and can only be used to fulfill the obligations of the entity. Additionally, the obligations of the VIEs do not have any recourse to the general credit of any other consolidated entities, nor to us as the consolidator of these VIEs. | |
The VIE liabilities initially represent investment securities on our balance sheet (pre-consolidation). Upon consolidation of these VIEs, our associated investment securities are eliminated, as is the interest income related to those securities. Similarly, the fees we earn in our roles as special servicer of the bonds issued by the consolidated VIEs or as collateral administrator of the consolidated VIEs are also eliminated. Finally, an allocable portion of the identified servicing intangible associated with the eliminated fee streams is eliminated in consolidation. | |
Refer to the segment data in Note 21 for a presentation of the Investing and Servicing Segment without consolidation of these VIEs. | |
Basis of Accounting and Principles of Consolidation | |
The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries and VIEs. Intercompany amounts have been eliminated in consolidation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows have been included. | |
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the operating results for the full year. | |
Refer to our Form 10-K for a description of our recurring accounting policies. We have included disclosure in this Note 2 regarding principles of consolidation and other accounting policies that (i) are required to be disclosed quarterly, (ii) we view as critical, or (iii) became significant since December 31, 2014 due to a corporate action or increase in the significance of the underlying business activity. | |
Variable Interest Entities | |
We evaluate all of our interests in VIEs for consolidation. When our interests are determined to be variable interests, we assess whether we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Accounting Standards Codification (“ASC”) 810, Consolidation, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. We consider our variable interests as well as any variable interests of our related parties in making this determination. Where both of these factors are present, we are deemed to be the primary beneficiary and we consolidate the VIE. Where either one of these factors is not present, we are not the primary beneficiary and do not consolidate the VIE. | |
To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. | |
To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that we apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by us. | |
Our purchased investment securities include CMBS which are unrated and non-investment grade rated securities issued by CMBS trusts. In certain cases, we may contract to provide special servicing activities for these CMBS trusts, or, as holder of the controlling class, we may have the right to name and remove the special servicer for these trusts. In our role as special servicer, we provide services on defaulted loans within the trusts, such as foreclosure or work-out procedures, as permitted by the underlying contractual agreements. In exchange for these services, we receive a fee. These rights give us the ability to direct activities that could significantly impact the trust’s economic performance. However, in those instances where an unrelated third party has the right to unilaterally remove us as special servicer, we do not have the power to direct activities that most significantly impact the trust’s economic performance. We evaluated all of our positions in such investments for consolidation. | |
For VIEs in which we are determined to be the primary beneficiary, all of the underlying assets, liabilities and equity of the structures are recorded on our books, and the initial investment, along with any associated unrealized holding gains and losses, are eliminated in consolidation. Similarly, the interest income earned from these structures, as well as the fees paid by these trusts to us in our capacity as special servicer, are eliminated in consolidation. Further, an allocable portion of the identified servicing intangible asset associated with the servicing fee streams, and the corresponding allocable amortization or change in fair value of the servicing intangible asset, are also eliminated in consolidation. | |
We perform ongoing reassessments of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding our involvement with a VIE causes our consolidation conclusion regarding the VIE to change. | |
We separately present the assets and liabilities of our consolidated VIEs as individual line items on our consolidated balance sheets. The assets of consolidated VIEs consist of loans and foreclosed loans which have been temporarily converted into real estate owned. These assets are presented in the aggregate because they are similar in nature and can only be used to settle the obligations of the consolidated VIEs. There is no recourse to the general credit of the Company for the obligations of our consolidated VIEs. | |
We elect the fair value option for initial and subsequent recognition of the assets and liabilities of our consolidated VIEs. Interest income and interest expense associated with these VIEs are no longer relevant on a standalone basis because these amounts are already reflected in the fair value changes. We have elected to present these items in a single line on our condensed consolidated statements of operations. The residual difference shown on our condensed consolidated statements of operations in the line item “Income of consolidated VIEs, net” represents our beneficial interest in the VIEs. | |
Convertible Senior Notes | |
ASC 470, Debt, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. The equity components of the convertible notes have been reflected within additional paid-in capital in our condensed consolidated balance sheets. The resulting debt discount is being amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. | |
Upon repurchase of convertible debt instruments, ASC 470-20 requires the issuer to allocate total settlement consideration inclusive of transaction costs amongst the liability and equity components of the instrument based on the fair value of the liability component immediately prior to repurchase. The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component including unamortized debt issuance costs is recognized as gain (loss) on debt extinguishment in our condensed consolidated statements of operations. The remaining settlement consideration allocated to the equity component is recognized as a reduction of additional paid-in capital in our condensed consolidated balance sheets. | |
Discontinued Operations | |
On January 31, 2014, we completed the spin-off of our former SFR segment to our stockholders as discussed in Note 1. In accordance with ASC 205, Presentation of Financial Statements, the results of the SFR segment are presented within discontinued operations in our condensed consolidated statements of operations for the three months ended March 31, 2014. | |
Fair Value Option | |
The guidance in ASC 825, Financial Instruments, provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our consolidated balance sheets from those instruments using another accounting method. | |
We have elected the fair value option for eligible financial assets and liabilities of our consolidated VIEs, loans held-for-sale originated by the Investing and Servicing Segment’s conduit platform, purchased CMBS issued by VIEs we could consolidate in the future and certain investments in marketable equity securities. The fair value elections for VIE and securitization related items were made in order to mitigate accounting mismatches between the carrying value of the instruments and the related assets and liabilities that we consolidate at fair value. The fair value elections for mortgage loans held-for-sale originated by the Investing and Servicing Segment’s conduit platform were made due to the short-term nature of these instruments. The fair value elections for investments in marketable equity securities were made because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market. | |
Fair Value Measurements | |
We measure our mortgage‑backed securities, derivative assets and liabilities, domestic servicing rights intangible asset and any assets or liabilities where we have elected the fair value option at fair value. When actively quoted observable prices are not available, we either use implied pricing from similar assets and liabilities or valuation models based on net present values of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. | |
As discussed above, we measure the assets and liabilities of consolidated VIEs at fair value pursuant to our election of the fair value option. The VIEs in which we invest are “static”; that is, no reinvestment is permitted, and there is no active management of the underlying assets. In determining the fair value of the assets and liabilities of the VIE, we maximize the use of observable inputs over unobservable inputs. We also acknowledge that our principal market for selling CMBS assets is the securitization market where the market participant is considered to be a CMBS trust or a collateralized debt obligation (“CDO”). This methodology results in the fair value of the assets of a static CMBS trust being equal to the fair value of its liabilities. Refer to Note 18 for further information regarding our fair value measurements. | |
Loans Receivable and Provision for Loan Losses | |
In our Lending Segment we purchase and originate commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Actual losses, if any, could ultimately differ from these estimates. | |
We perform a quarterly review of our portfolio of loans. In connection with this review, we assess the performance of each loan and assign a risk rating based on several factors including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” through “5”, from less risk to greater risk in connection with this review. | |
Earnings Per Share | |
We present both basic and diluted earnings per share (“EPS”) amounts in our financial statements. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from (i) our share-based compensation, consisting of unvested restricted stock (“RSAs”) and restricted stock units (“RSUs”), (ii) contingently issuable shares to our Manager; and (iii) the “in-the-money” conversion options associated with our outstanding convertible notes (see further discussion in Note 16). Potential dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period. | |
The Company’s unvested RSUs and RSAs contain rights to receive non-forfeitable dividends and thus are participating securities. Due to the existence of these participating securities, the two-class method of computing EPS is required, unless another method is determined to be more dilutive. Under the two-class method, undistributed earnings are reallocated between shares of common stock and participating securities. For the three months ended March 31, 2015 and 2014, the two-class method resulted in the most dilutive EPS calculation. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant and subjective estimate that we make is the projection of cash flows we expect to receive on our loans, investment securities and intangible assets, which has a significant impact on the amounts of interest income, credit losses (if any), and fair values that we record and/or disclose. In addition, the fair value of financial assets and liabilities that are estimated using a discounted cash flows method is significantly impacted by the rates at which we estimate market participants would discount the expected cash flows. | |
Recent Accounting Developments | |
On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which establishes key principles by which an entity determines the amount and timing of revenue recognized from customer contracts. The ASU is effective for the first interim or annual period beginning after December 15, 2016. Early application is not permitted. We do not expect the application of this ASU to materially impact the Company. | |
On February 18, 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis, which amends the criteria for determining which entities are considered VIEs, amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2015. Early application is permitted. We are in the process of assessing what impact this ASU will have on the Company. | |
On April 7, 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30), which requires entities to present debt issuance costs as a direct deduction from the carrying value of the related debt liability, consistent with debt discounts, rather than as a separate deferred asset as the previous guidance required. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2015. We do not expect the application of this ASU to materially impact the Company. | |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Acquisitions and Divestitures | |||||
Acquisitions and Divestitures | 3. Acquisitions and Divestitures | ||||
SFR Spin-off | |||||
As described in Note 1, on January 31, 2014, we completed the spin-off of our former SFR segment to our stockholders. The results of operations for the SFR segment are presented within discontinued operations in our condensed consolidated statement of operations for the three months ended March 31, 2014. We have no continuing involvement with the SFR segment following the spin-off. Subsequent to the spin-off, SWAY entered into a management agreement with an affiliate of our Manager. The following table presents the summarized consolidated results of discontinued operations for the SFR segment prior to the spin-off (in thousands): | |||||
For the Three Months Ended | |||||
31-Mar-14 | |||||
Total revenues | $ | 3,876 | |||
Total costs and expenses | 6,369 | ||||
Loss before other income and income taxes | -2,493 | ||||
Total other income | 942 | ||||
Loss before income taxes | -1,551 | ||||
Income tax provision | — | ||||
Net loss | $ | -1,551 | |||
Ireland Portfolio Acquisition | |||||
In March 2015, we entered into agreements to acquire a portfolio of nine office properties and one multi-family residential property all located in Dublin, Ireland. The completion of the acquisition is subject to our entrance into definitive agreements to acquire three additional office properties also located in Dublin. The aggregate purchase price for all 13 properties, which collectively comprise approximately 630,000 square feet, is approximately €452.5 million. The acquisitions are subject to customary closing conditions. | |||||
Divestiture of Commercial Real Estate | |||||
In March 2015, we sold an operating property that we had previously acquired from a CMBS trust. The sale resulted in a $17.1 million gain, which is included in gain on sale of investments and other assets in our condensed consolidated statement of operations for the three months ended March 31, 2015. | |||||
Loans
Loans | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||||
Loans | 4. Loans | |||||||||||||||||||||||||
Our loans held-for-investment are accounted for at amortized cost and our loans held-for-sale are accounted for at the lower of cost or fair value, unless we have elected the fair value option. The following tables summarize our investments in mortgages and loans by subordination class as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||||
Weighted | Average Life | |||||||||||||||||||||||||
Carrying | Face | Average | (“WAL”) | |||||||||||||||||||||||
31-Mar-15 | Value | Amount | Coupon | (years)(2) | ||||||||||||||||||||||
First mortgages | $ | 4,008,607 | $ | 4,073,852 | 5.2 | % | 3.6 | |||||||||||||||||||
Subordinated mortgages(1) | 325,172 | 353,614 | 7.9 | % | 3.8 | |||||||||||||||||||||
Mezzanine loans | 1,713,394 | 1,707,767 | 10.2 | % | 3.3 | |||||||||||||||||||||
Total loans held-for-investment | 6,047,173 | 6,135,233 | ||||||||||||||||||||||||
Loans held-for-sale, fair value option elected | 343,770 | 338,795 | 4.4 | % | 9.3 | |||||||||||||||||||||
Loans transferred as secured borrowings | 95,000 | 95,000 | 6.0 | % | 2.3 | |||||||||||||||||||||
Total gross loans | 6,485,943 | 6,569,028 | ||||||||||||||||||||||||
Loan loss allowance (loans held-for-investment) | -6,348 | — | ||||||||||||||||||||||||
Total net loans | $ | 6,479,595 | $ | 6,569,028 | ||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||
First mortgages | $ | 3,834,700 | $ | 3,898,021 | 5.4 | % | 3.6 | |||||||||||||||||||
Subordinated mortgages(1) | 345,091 | 374,859 | 8.1 | % | 3.9 | |||||||||||||||||||||
Mezzanine loans | 1,605,478 | 1,601,453 | 10.3 | % | 3.0 | |||||||||||||||||||||
Total loans held-for-investment | 5,785,269 | 5,874,333 | ||||||||||||||||||||||||
Loans held-for-sale, fair value option elected | 391,620 | 390,342 | 4.5 | % | 8.3 | |||||||||||||||||||||
Loans transferred as secured borrowings | 129,427 | 129,570 | 5.4 | % | 2.5 | |||||||||||||||||||||
Total gross loans | 6,306,316 | 6,394,245 | ||||||||||||||||||||||||
Loan loss allowance (loans held-for-investment) | -6,031 | — | ||||||||||||||||||||||||
Total net loans | $ | 6,300,285 | $ | 6,394,245 | ||||||||||||||||||||||
-1 | Subordinated mortgages include B-notes and junior participation in first mortgages where we do not own the senior A-note or senior participation. If we own both the A-note and B-note, we categorize the loan as a first mortgage loan. | |||||||||||||||||||||||||
-2 | Represents the WAL of each respective group of loans as of the respective balance sheet date. The WAL of each individual loan is calculated using amounts and timing of future principal payments, as projected at origination. | |||||||||||||||||||||||||
As of March 31, 2015, approximately $4.9 billion, or 80.4%, of our loans held-for-investment were variable rate and paid interest principally at LIBOR plus a weighted-average spread of 5.9%. The following table summarizes our investments in floating rate loans (amounts in thousands): | ||||||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||||||||||||
Carrying | Carrying | |||||||||||||||||||||||||
Index | Base Rate | Value | Base Rate | Value | ||||||||||||||||||||||
1 Month LIBOR USD | 0.1763 | % | $ | 337,566 | 0.1713 | % | $ | 138,576 | ||||||||||||||||||
3 Month LIBOR GBP | 0.5696 | % | 401,221 | 0.5640 | % | 440,222 | ||||||||||||||||||||
LIBOR floor | 0.15 - 3.00 | % (1) | 4,120,753 | 0.15 - 3.00 | % (1) | 3,889,412 | ||||||||||||||||||||
Total | $ | 4,859,540 | $ | 4,468,210 | ||||||||||||||||||||||
-1 | The weighted-average LIBOR Floor was 0.32% and 0.35% as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||||||||||
Our loans are typically collateralized by real estate. As a result, we regularly evaluate the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, as well as the financial and operating capability of the borrower. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan at maturity, and/or (iii) the property’s liquidation value. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as property operating statements, occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and discussions with market participants. | ||||||||||||||||||||||||||
Our evaluation process as described above produces an internal risk rating between 1 and 5, which is a weighted average of the numerical ratings in the following categories: (i) sponsor capability and financial condition, (ii) loan and collateral performance relative to underwriting, (iii) quality and stability of collateral cash flows, and (iv) loan structure. We utilize the overall risk ratings as a concise means to monitor any credit migration on a loan as well as on the whole portfolio. While the overall risk rating is generally not the sole factor we use in determining whether a loan is impaired, a loan with a higher overall risk rating would tend to have more adverse indicators of impairment, and therefore would be more likely to experience a credit loss. | ||||||||||||||||||||||||||
The rating categories generally include the characteristics described below, but these are utilized as guidelines and therefore not every loan will have all of the characteristics described in each category: | ||||||||||||||||||||||||||
Rating | Characteristics | |||||||||||||||||||||||||
1 | | Sponsor capability and financial condition—Sponsor is highly rated or investment grade or, if private, the equivalent thereof with significant management experience. | ||||||||||||||||||||||||
| Loan collateral and performance relative to underwriting—The collateral has surpassed underwritten expectations. | |||||||||||||||||||||||||
| Quality and stability of collateral cash flows—Occupancy is stabilized, the property has had a history of consistently high occupancy, and the property has a diverse and high quality tenant mix. | |||||||||||||||||||||||||
| Loan structure—Loan‑to‑collateral value ratio (“LTV”) does not exceed 65%. The loan has structural features that enhance the credit profile. | |||||||||||||||||||||||||
2 | | Sponsor capability and financial condition—Strong sponsorship with experienced management team and a responsibly leveraged portfolio. | ||||||||||||||||||||||||
| Loan collateral and performance relative to underwriting—Collateral performance equals or exceeds underwritten expectations and covenants and performance criteria are being met or exceeded. | |||||||||||||||||||||||||
| Quality and stability of collateral cash flows—Occupancy is stabilized with a diverse tenant mix. | |||||||||||||||||||||||||
| Loan structure—LTV does not exceed 70% and unique property risks are mitigated by structural features. | |||||||||||||||||||||||||
3 | | Sponsor capability and financial condition—Sponsor has historically met its credit obligations, routinely pays off loans at maturity, and has a capable management team. | ||||||||||||||||||||||||
| Loan collateral and performance relative to underwriting—Property performance is consistent with underwritten expectations. | |||||||||||||||||||||||||
| Quality and stability of collateral cash flows—Occupancy is stabilized, near stabilized, or is on track with underwriting. | |||||||||||||||||||||||||
| Loan structure—LTV does not exceed 80%. | |||||||||||||||||||||||||
4 | | Sponsor capability and financial condition—Sponsor credit history includes missed payments, past due payment, and maturity extensions. Management team is capable but thin. | ||||||||||||||||||||||||
| Loan collateral and performance relative to underwriting—Property performance lags behind underwritten expectations. Performance criteria and loan covenants have required occasional waivers. A sale of the property may be necessary in order for the borrower to pay off the loan at maturity. | |||||||||||||||||||||||||
| Quality and stability of collateral cash flows—Occupancy is not stabilized and the property has a large amount of rollover. | |||||||||||||||||||||||||
| Loan structure—LTV is 80% to 90%. | |||||||||||||||||||||||||
5 | | Sponsor capability and financial condition—Credit history includes defaults, deeds‑in‑lieu, foreclosures, and/or bankruptcies. | ||||||||||||||||||||||||
| Loan collateral and performance relative to underwriting—Property performance is significantly worse than underwritten expectations. The loan is not in compliance with loan covenants and performance criteria and may be in default. Sale proceeds would not be sufficient to pay off the loan at maturity. | |||||||||||||||||||||||||
| Quality and stability of collateral cash flows—The property has material vacancy and significant rollover of remaining tenants. | |||||||||||||||||||||||||
| Loan structure—LTV exceeds 90%. | |||||||||||||||||||||||||
As of March 31, 2015, the risk ratings for loans subject to our rating system, which excludes loans on the cost recovery method and loans for which the fair value option has been elected, by class of loan were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Balance Sheet Classification | ||||||||||||||||||||||||||
Loans Held-For-Investment | Loans | |||||||||||||||||||||||||
Cost | Transferred | % of | ||||||||||||||||||||||||
Risk Rating | First | Subordinated | Mezzanine | Recovery | Loans Held- | As Secured | Total | |||||||||||||||||||
Category | Mortgages | Mortgages | Loans | Loans | For-Sale | Borrowings | Total | Loans | ||||||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | — | % | ||||||||||
2 | 287,280 | 109,085 | 208,402 | — | — | — | 604,767 | 9.3 | % | |||||||||||||||||
3 | 3,562,495 | 183,457 | 1,377,479 | — | — | 95,000 | 5,218,431 | 80.5 | % | |||||||||||||||||
4 | 109,755 | 32,630 | 127,513 | — | — | — | 269,898 | 4.2 | % | |||||||||||||||||
5 | 45,983 | — | — | — | — | — | 45,983 | 0.7 | % | |||||||||||||||||
N/A | — | — | — | 3,094 | 343,770 | — | 346,864 | 5.3 | % | |||||||||||||||||
$ | 4,005,513 | $ | 325,172 | $ | 1,713,394 | $ | 3,094 | $ | 343,770 | $ | 95,000 | $ | 6,485,943 | 100.0 | % | |||||||||||
As of December 31, 2014, the risk ratings for loans subject to our rating system by class of loan were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Balance Sheet Classification | ||||||||||||||||||||||||||
Loans Held-For-Investment | Loans | |||||||||||||||||||||||||
Cost | Transferred | % of | ||||||||||||||||||||||||
Risk Rating | First | Subordinated | Mezzanine | Recovery | Loans Held- | As Secured | Total | |||||||||||||||||||
Category | Mortgages | Mortgages | Loans | Loans | For-Sale | Borrowings | Total | Loans | ||||||||||||||||||
1 | $ | 822 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 822 | — | % | ||||||||||
2 | 115,407 | 116,168 | 291,997 | — | — | — | 523,572 | 8.3 | % | |||||||||||||||||
3 | 3,559,716 | 196,476 | 1,206,624 | — | — | 129,427 | 5,092,243 | 80.7 | % | |||||||||||||||||
4 | 109,489 | 32,447 | 106,857 | — | — | — | 248,793 | 4.0 | % | |||||||||||||||||
5 | 45,974 | — | — | — | — | — | 45,974 | 0.7 | % | |||||||||||||||||
N/A | — | — | — | 3,292 | 391,620 | — | 394,912 | 6.3 | % | |||||||||||||||||
$ | 3,831,408 | $ | 345,091 | $ | 1,605,478 | $ | 3,292 | $ | 391,620 | $ | 129,427 | $ | 6,306,316 | 100.0 | % | |||||||||||
After completing our impairment evaluation process, we concluded that no impairment charges were required on any individual loans held-for-investment as of March 31, 2015 or December 31, 2014. As of March 31, 2015, approximately $3.1 million of our loans held-for-investment were 90 days past due or greater, all of which are within the Investing and Servicing Segment and were acquired as part of the acquisition of LNR Property LLC (“LNR”). None of our held-for-sale loans where we have elected the fair value option were 90 days past due or greater or on nonaccrual status. | ||||||||||||||||||||||||||
In accordance with our policies, we record an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4,” plus (ii) 5% of the aggregate carrying amount of loans rated as a “5.” The following table presents the activity in our allowance for loan losses (amounts in thousands): | ||||||||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
Allowance for loan losses at January 1 | $ | 6,031 | $ | 3,984 | ||||||||||||||||||||||
Provision for loan losses | 317 | 497 | ||||||||||||||||||||||||
Charge-offs | — | — | ||||||||||||||||||||||||
Recoveries | — | — | ||||||||||||||||||||||||
Allowance for loan losses at March 31 | $ | 6,348 | $ | 4,481 | ||||||||||||||||||||||
Recorded investment in loans related to the allowance for loan loss | $ | 315,881 | $ | 298,753 | ||||||||||||||||||||||
The activity in our loan portfolio was as follows (amounts in thousands): | ||||||||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
Balance at January 1 | $ | 6,300,285 | $ | 4,750,804 | ||||||||||||||||||||||
Acquisitions/originations/additional funding | 1,063,108 | 981,762 | ||||||||||||||||||||||||
Capitalized interest(1) | 17,490 | 8,656 | ||||||||||||||||||||||||
Basis of loans sold(2) | -567,033 | -448,317 | ||||||||||||||||||||||||
Loan maturities/principal repayments | -320,379 | -353,934 | ||||||||||||||||||||||||
Discount accretion/premium amortization | 10,179 | 1,806 | ||||||||||||||||||||||||
Changes in fair value | 21,131 | 20,893 | ||||||||||||||||||||||||
Unrealized foreign currency remeasurement (loss) gain | -45,907 | 3,629 | ||||||||||||||||||||||||
Change in loan loss allowance, net | -317 | -497 | ||||||||||||||||||||||||
Transfer to/from other asset classifications | 1,038 | — | ||||||||||||||||||||||||
Balance at March 31 | $ | 6,479,595 | $ | 4,964,802 | ||||||||||||||||||||||
-1 | Represents accrued interest income on loans whose terms do not require current payment of interest. | |||||||||||||||||||||||||
-2 | See Note 10 for additional disclosure on these transactions. | |||||||||||||||||||||||||
Investment_in_Unconsolidated_E
Investment in Unconsolidated Entities | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Investment in Unconsolidated Entities | ||||||||||||
Investment in Unconsolidated Entities | 6. Investment in Unconsolidated Entities | |||||||||||
The below table summarizes our investments in unconsolidated entities as of March 31, 2015 and December 31, 2014 (dollar amounts in thousands): | ||||||||||||
Carrying value over (under) | ||||||||||||
Participation / | Carrying value as of | equity in net assets as of | ||||||||||
Ownership %(1) | 31-Mar-15 | 31-Dec-14 | March 31, 2015(2) | |||||||||
Equity method: | ||||||||||||
Retail Fund | 33% | $ | 128,308 | $ | 129,475 | $ | — | |||||
Investor entity which owns equity in two real estate services providers | 50% | 21,888 | 21,534 | — | ||||||||
Equity interests in commercial real estate(3) | 16% - 43% | 28,149 | — | — | ||||||||
Bridge loan venture | various | 8,329 | 8,417 | 65 | ||||||||
Various | 25% - 50% | 6,101 | 16,933 | -3,090 | ||||||||
192,775 | 176,359 | $ | -3,025 | |||||||||
Cost method: | ||||||||||||
Investment funds which own equity in a loan servicer and other real estate assets | 4% - 6% | 9,225 | 9,225 | |||||||||
Various | 2% - 10% | 7,833 | 8,399 | |||||||||
17,058 | 17,624 | |||||||||||
$ | 209,833 | $ | 193,983 | |||||||||
-1 | None of these investments are publicly traded and therefore quoted market prices are not available. | |||||||||||
-2 | Differences between the carrying value of our investment and the underlying equity in net assets of the investee are accounted for as if the investee were a consolidated entity in accordance with ASC 323, Investments—Equity Method and Joint Ventures. | |||||||||||
-3 | During the three months ended March 31 2015, we acquired $28.0 million of equity interests in limited liability companies that own ten office and student housing properties throughout the U.S. | |||||||||||
During the three months ended March 31, 2015, we recognized $2.6 million of income from the Retail Fund. | ||||||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Goodwill and Intangible Assets | |||||||
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets | ||||||
Goodwill | |||||||
Goodwill at March 31, 2015 and December 31, 2014 represents the excess of consideration transferred over the fair value of net assets of LNR acquired on April 19, 2013. The goodwill recognized is attributable to value embedded in LNR’s existing platform, which includes an international network of commercial real estate asset managers, work-out specialists, underwriters and administrative support professionals as well as proprietary historical performance data on commercial real estate assets. | |||||||
Servicing Rights Intangibles | |||||||
In connection with the LNR acquisition, we identified domestic and European servicing rights that existed at the purchase date, based upon the expected future cash flows of the associated servicing contracts. All of our servicing fees are specified by these Pooling and Servicing Agreements. At March 31, 2015 and December 31, 2014, the balance of the domestic servicing intangible was net of $42.7 million and $46.1 million, respectively, that was eliminated in consolidation pursuant to ASC 810 against VIE assets in connection with our consolidation of securitization VIEs. Before VIE consolidation, as of March 31, 2015 and December 31, 2014 the domestic servicing intangible had a balance of $173.5 million and $178.4 million, respectively, which represents our economic interest in this asset. | |||||||
The table below presents information about our GAAP servicing intangibles for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||
Domestic servicing rights, at fair value | 2015 | 2014 | |||||
Fair value at January 1 | $ | 132,303 | $ | 150,149 | |||
Changes in fair value due to changes in inputs and assumptions | -1,542 | -5,251 | |||||
Fair value at March 31 | 130,761 | 144,898 | |||||
European servicing rights | |||||||
Net carrying amount at January 1 (fair value of $12.7 million and $29.3 million) | 11,849 | 27,024 | |||||
Foreign exchange (loss) gain | -504 | 145 | |||||
Amortization | -3,304 | -4,011 | |||||
Net carrying value at March 31 (fair value of $11.2 million and $24.4 million) | 8,041 | 23,158 | |||||
Total servicing rights at March 31 | $ | 138,802 | $ | 168,056 | |||
Accumulated amortization at March 31, net of foreign exchange effect | -23,723 | -12,559 | |||||
Secured_Financing_Agreements
Secured Financing Agreements | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Secured Financing Agreements. | |||||||||||||||||||||
Convertible Senior Notes | |||||||||||||||||||||
8. Secured Financing Agreements | |||||||||||||||||||||
The following table is a summary of our secured financing agreements in place as of March 31, 2015 and December 31, 2014 (dollars in thousands): | |||||||||||||||||||||
Pledged | |||||||||||||||||||||
Asset | Maximum | Carrying Value at | |||||||||||||||||||
Current | Extended | Carrying | Facility | March 31, | December 31, | ||||||||||||||||
Maturity | Maturity(a) | Pricing | Value | Size | 2015 | 2014 | |||||||||||||||
Lender 1 Repo 1 | (b) | (b) | LIBOR + 1.85% to 5.25% | $ | 1,474,127 | $ | 1,250,000 | $ | 1,040,651 | $ | 875,111 | ||||||||||
Lender 1 Repo 2 | (c) | N/A | LIBOR + 1.90% | 195,032 | 125,000 | 117,125 | 101,886 | ||||||||||||||
Lender 2 Repo 1 | Oct-15 | Oct-18 | LIBOR + 1.75% to 2.75% | 410,800 | 325,000 | 304,596 | 240,188 | ||||||||||||||
Lender 3 Repo 1 | May-17 | May-19 | LIBOR + 2.85% | 177,443 | 123,366 | 123,366 | 124,250 | ||||||||||||||
Conduit Repo 1 | Sep-15 | Sep-16 | LIBOR + 1.90% | 72,603 | 150,000 | 53,513 | 94,727 | ||||||||||||||
Conduit Repo 2 | Nov-15 | Nov-16 | LIBOR + 2.10% | 155,532 | 150,000 | 115,376 | 113,636 | ||||||||||||||
Conduit Repo 3 | Feb-18 | Feb-19 | LIBOR + 2.10% | 96,419 | 150,000 | 70,826 | — | ||||||||||||||
Lender 4 Repo 1 | Oct-15 | Oct-17 | LIBOR + 2.60% | 396,381 | 311,178 | 311,178 | 327,117 | ||||||||||||||
Lender 5 Repo 1 | (d) | N/A | N/A | — | — | — | 58,079 | ||||||||||||||
Lender 6 Repo 1 | Aug-17 | Aug-18 | LIBOR + 2.75% to 3.00% | 572,477 | 500,000 | 398,201 | 296,967 | ||||||||||||||
Lender 7 Repo 1 | Dec-16 | N/A | LIBOR + 2.60% to 2.70% | 50,377 | 39,024 | 39,024 | 39,024 | ||||||||||||||
Lender 8 Mortgage | Nov-24 | N/A | 4.59% | 17,904 | 14,000 | 14,000 | 14,000 | ||||||||||||||
Lender 9 Repo 1 | (e) | (e) | LIBOR + 1.40% to 1.85% | 275,061 | 190,463 | 190,463 | — | ||||||||||||||
Borrowing Base | Sep-15 | Sep-17 | LIBOR + 3.25% | (f) | 1,009,289 | 450,000 | (g) | 272,173 | 189,871 | ||||||||||||
Term Loan | Apr-20 | N/A | LIBOR + 2.75% | (f) | 2,665,096 | 663,347 | 661,342 | (h) | 662,933 | (h) | |||||||||||
$ | 7,568,541 | $ | 4,441,378 | $ | 3,711,834 | $ | 3,137,789 | ||||||||||||||
(a) | Subject to certain conditions as defined in the respective facility agreement. | ||||||||||||||||||||
(b) | Maturity date for borrowings collateralized by loans of January 2017 before extension options and January 2019 assuming initial extension options. | ||||||||||||||||||||
(c) | The date that is 180 days after the buyer delivers notice to seller, subject to a maximum date of March 2017. | ||||||||||||||||||||
(d) | Facility was terminated at our option in March 2015. | ||||||||||||||||||||
(e) | Facility carries a rolling twelve month term which may reset monthly with the lender’s consent. Current maturity is March 2016. Facility carries no maximum borrowing capacity. Amount herein reflects the outstanding balance as of March 31, 2015. | ||||||||||||||||||||
(f) | Subject to borrower’s option to choose alternative benchmark based rates pursuant to the terms of the credit agreement. The Term Loan is also subject to a 75 basis point floor. | ||||||||||||||||||||
(g) | Maximum borrowings under this facility were temporarily increased from $250.0 million to $450.0 million. This increase expires in June 2015. | ||||||||||||||||||||
(h) | Term loan outstanding balance is net of $2.0 million and $2.1 million of unamortized discount as of March 31, 2015 and December 31, 2014. | ||||||||||||||||||||
In the normal course of business, the Company is in discussions with its lenders to extend or amend any financing facilities which contain near term expirations. | |||||||||||||||||||||
In February 2015, we executed a $150.0 million repurchase facility (“Conduit Repo 3”) with an existing lender for our Investing and Servicing Segment’s conduit platform. The facility carries a three year initial term with a one year extension option and an annual interest rate of LIBOR +2.10%. | |||||||||||||||||||||
In March 2015, we executed a repurchase facility (“Lender 9 Repo 1”) with a new lender to finance certain CMBS holdings, including CMBS holdings previously financed under the Lender 5 Repo 1 facility which was terminated at our option in March 2015. There is no maximum facility size specified under the facility as the lender will evaluate all eligible collateral on an individual basis. As of March 31, 2015, borrowings totaled $190.5 million. The facility carries a rolling twelve month term which may reset monthly with the lender’s consent and an annual interest rate of LIBOR +1.40% to LIBOR +1.85% depending on the CMBS collateral. | |||||||||||||||||||||
Subsequent to March 31, 2015, we amended the Lender 4 Repo 1 facility to reduce pricing. | |||||||||||||||||||||
Our secured financing agreements contain certain financial tests and covenants. Should we breach certain of these covenants, it may restrict our ability to pay dividends in the future. As of March 31, 2015, we were in compliance with all such covenants. | |||||||||||||||||||||
The following table sets forth our five-year principal repayments schedule for secured financings, assuming no defaults and excluding loans transferred as secured borrowings. Our credit facilities generally require principal to be paid down prior to the facilities’ respective maturities if and when we receive principal payments on, or sell, the investment collateral that we have pledged. The amount reflected in each period includes principal repayments on our credit facilities that would be required if (i) we received the repayments that we expect to receive on the investments that have been pledged as collateral under the credit facilities, as applicable, and (ii) the credit facilities that are expected to have amounts outstanding at their current maturity dates are extended where extension options are available to us (amounts in thousands): | |||||||||||||||||||||
2015 (remainder of) | $ | 539,658 | |||||||||||||||||||
2016 | 212,114 | ||||||||||||||||||||
2017 | 1,088,785 | ||||||||||||||||||||
2018 | 462,317 | ||||||||||||||||||||
2019 | 765,770 | ||||||||||||||||||||
Thereafter(1) | 645,195 | ||||||||||||||||||||
Total | $ | 3,713,839 | |||||||||||||||||||
-1 | Principal paydown of the Term Loan through 2020 excludes $2.0 million of discount amortization. | ||||||||||||||||||||
Secured financing maturities for 2015 primarily relate to $239.7 million on the Conduit Repo facilities and $272.2 million on the Borrowing Base facility. | |||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, we had approximately $24.3 million and $26.5 million, respectively, of deferred financing costs from secured financing agreements, net of amortization, which is included in other assets on our condensed consolidated balance sheets. For the three months ended March 31, 2015 and 2014, approximately $3.5 million and $2.9 million, respectively, of amortization was included in interest expense on our condensed consolidated statements of operations. | |||||||||||||||||||||
Convertible_Senior_Notes
Convertible Senior Notes | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Convertible Senior Notes. | ||||||||||||||||
Convertible Senior Notes | 9. Convertible Senior Notes | |||||||||||||||
On October 8, 2014, we issued $431.3 million of 3.75% Convertible Senior Notes due 2017 (the “2017 Notes”). On February 15, 2013, we issued $600.0 million of 4.55% Convertible Senior Notes due 2018 (the “2018 Notes”). On July 3, 2013, we issued $460.0 million of 4.00% Convertible Senior Notes due 2019 (the “2019 Notes”). The following summarizes the unsecured convertible senior notes (collectively, the “Convertible Notes”) outstanding as of March 31, 2015 (amounts in thousands, except rates): | ||||||||||||||||
Remaining | ||||||||||||||||
Principal | Coupon | Effective | Conversion | Maturity | Period of | |||||||||||
Amount | Rate | Rate(1) | Rate(2) | Date | Amortization | |||||||||||
2017 Notes | $ | 431,250 | 3.75 | % | 5.87 | % | 41.7397 | 10/15/17 | 2.5 | years | ||||||
2018 Notes | $ | 599,981 | 4.55 | % | 6.10 | % | 45.3639 | 3/1/18 | 2.9 | years | ||||||
2019 Notes | $ | 355,872 | 4.00 | % | 5.37 | % | 48.2112 | 1/15/19 | 3.8 | years | ||||||
As of | As of | |||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Total principal | $ | 1,387,103 | $ | 1,491,228 | ||||||||||||
Net unamortized discount | -62,978 | -73,206 | ||||||||||||||
Carrying amount of debt components | $ | 1,324,125 | $ | 1,418,022 | ||||||||||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | $ | 48,401 | $ | 64,070 | ||||||||||||
-1 | Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in-capital. | |||||||||||||||
-2 | The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of Convertible Notes converted, as adjusted in accordance with the applicable indentures as a result of the spin-off of the SFR segment and cash dividend payments. The if-converted value of the 2017 Notes, 2018 Notes and 2019 Notes exceeded their principal amount by $6.1 million, $61.5 million and $61.1 million, respectively, at March 31, 2015 since the closing market price of the Company’s common stock of $24.30 per share exceeded the implicit conversion prices of $23.96, $22.04 and $20.74 per share, respectively. The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As a result, conversion of this principal amount, totaling 57.0 million shares, was not included in the computation of diluted earnings per share (“EPS”). However, the conversion spread value for the Convertible Notes, representing 5.4 million shares, was included in the computation of diluted EPS as the notes were “in-the-money”. See further discussion at Note 16. | |||||||||||||||
Under the repurchase program approved by our board of directors (refer to Note 15), we repurchased $104.1 million aggregate principal amount of our 2019 Notes during the three months ended March 31, 2015 for $119.8 million plus transaction expenses of $0.1 million. The repurchase price was allocated between the fair value of the liability component and the fair value of the equity component of the convertible security. The portion of the repurchase price attributable to the equity component totaled $15.7 million and was recognized as a reduction of additional paid-in capital during the three months ended March 31, 2015. The remaining repurchase price was attributable to the liability component. The difference between this amount and the net carrying amount of the liability and debt issuance costs was reflected as a loss on extinguishment of debt in our condensed consolidated statement of operations. For the three months ended March 31, 2015, the loss on extinguishment of debt totaled $5.3 million, consisting principally of the write-off of unamortized debt discount. | ||||||||||||||||
As of March 31, 2015 and December 31, 2014, we had approximately $2.0 million and $2.3 million, respectively, of deferred financing costs from our Convertible Senior Notes, net of amortization, which is included in other assets on our condensed consolidated balance sheets. | ||||||||||||||||
Conditions for Conversion | ||||||||||||||||
Prior to April 15, 2017 for the 2017 Notes, September 1, 2017 for the 2018 Notes and July 15, 2018 for the 2019 Notes, the Convertible Notes will be convertible only upon satisfaction of one or more of the following conditions: (1) the closing market price of the Company’s common stock is at least 110% for the 2017 Notes or 130% for the 2018 Notes and 2019 Notes of the conversion price of the respective Convertible Notes for at least 20 out of 30 trading days prior to the end of the preceding fiscal quarter, (2) the trading price of the Convertible Notes is less than 98% of the product of (i) the conversion rate and (ii) the closing price of the Company’s common stock during any five consecutive trading day period, (3) the Company issues certain equity instruments at less than the 10-day average closing market price of its common stock or the per-share value of certain distributions exceeds the market price of the Company’s common stock by more than 10% or (4) other specified corporate events (significant consolidation, sale, merger, share exchange, fundamental change, etc.) occur. | ||||||||||||||||
On or after April 15, 2017 for the 2017 Notes, September 1, 2017 for the 2018 Notes and July 15, 2018 for the 2019 Notes, holders may convert each of their notes at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. | ||||||||||||||||
Loan_SecuritizationSale_Activi
Loan Securitization/Sale Activities | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Loan Securitization/Sale Activities | |||||||||||||
Loan Securitization/Sale Activities | 10. Loan Securitization/Sale Activities | ||||||||||||
As described below, we regularly sell loans and notes under various strategies. We evaluate such sales as to whether they meet the criteria for treatment as a sale—legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint, and transfer of control. | |||||||||||||
Within the Investing and Servicing Segment, we originate commercial mortgage loans with the intent to sell these mortgage loans to VIEs for the purposes of securitization. These VIEs then issue CMBS that are collateralized in part by these assets, as well as other assets transferred to the VIE. In certain instances, we retain a subordinated interest in the VIE and serve as special servicer for the VIE. During the three months ended March 31, 2015 and 2014, we sold $464.6 million and $289.4 million, respectively, par value of loans held-for-sale from our conduit platform for their fair values of $482.0 million and $302.5 million, respectively. During the three months ended March 31, 2015 and 2014, the sale proceeds were used in part to repay $344.4 million and $217.0 million, respectively, of the outstanding balance of the repurchase agreements associated with these loans. | |||||||||||||
Within the Lending Segment (refer to Note 21), we originate or acquire loans and then subsequently sell a portion, which can be in various forms including first mortgages, A-Notes, senior participations and mezzanine loans. Typically, our motivation for entering into these transactions is to effectively create leverage on the subordinated position that we will retain and hold for investment. In certain instances, we continue to service the loan following its sale. The following table summarizes our loans sold and loans transferred as secured borrowings by the Lending Segment net of expenses (in thousands): | |||||||||||||
Loan Transfers | |||||||||||||
Loan Transfers Accounted | Accounted for as Secured | ||||||||||||
for as Sales | Borrowings | ||||||||||||
Face Amount | Proceeds | Face Amount | Proceeds | ||||||||||
For the Three Months Ended March 31, | |||||||||||||
2015 | $ | 85,500 | $ | 85,121 | $ | — | $ | — | |||||
2014 | 147,884 | 146,400 | — | — | |||||||||
Derivatives_and_Hedging_Activi
Derivatives and Hedging Activity | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Derivatives and Hedging Activity | |||||||||||||
Derivatives and Hedging Activity | |||||||||||||
11. Derivatives and Hedging Activity | |||||||||||||
Risk Management Objective of Using Derivatives | |||||||||||||
We are exposed to certain risks arising from both our business operations and economic conditions. Refer to Note 12 to the consolidated financial statements included in our Form 10-K for further discussion of our risk management objectives and policies. | |||||||||||||
Designated Hedges | |||||||||||||
Our objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. | |||||||||||||
In connection with our repurchase agreements, we have entered into eight outstanding interest rate swaps that have been designated as cash flow hedges of the interest rate risk associated with forecasted interest payments. As of March 31, 2015, the aggregate notional amount of our interest rate swaps designated as cash flow hedges of interest rate risk totaled $100.6 million. Under these agreements, we will pay fixed monthly coupons at fixed rates ranging from 0.56% to 2.23% of the notional amount to the counterparty and receive floating rate LIBOR. Our interest rate swaps designated as cash flow hedges of interest rate risk have maturities ranging from November 2015 to May 2021. | |||||||||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three months ended March 31, 2015 and 2014 we did not recognize any hedge ineffectiveness in earnings. | |||||||||||||
Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the associated variable-rate debt. Over the next twelve months, we estimate that an additional $0.6 million will be reclassified as an increase to interest expense. We are hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of 74 months. | |||||||||||||
Non-designated Hedges | |||||||||||||
Derivatives not designated as hedges are derivatives that do not meet the criteria for hedge accounting under GAAP or which we have not elected to designate as hedges. We do not use these derivatives for speculative purposes but instead they are used to manage our exposure to foreign exchange rates, interest rate changes, and certain credit spreads. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in gain (loss) on derivative financial instruments in our condensed consolidated statements of operations. The Investing and Servicing Segment conduit platform uses interest rate and credit index instruments to manage exposures related to commercial mortgage loans held-for-sale. | |||||||||||||
We have entered into a series of forward contracts whereby we agreed to sell an amount of foreign currency for an agreed upon amount of USD at various dates through January 2018. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments. | |||||||||||||
As of March 31, 2015, we had 58 foreign exchange forward derivatives to sell pounds sterling (“GBP”) with a total notional amount of £288.0 million, 32 foreign exchange forward derivatives to sell Euros (“EUR”) with a total notional amount of €131.4 million, two foreign exchange forward derivatives to sell Swedish Krona (“SEK”) with a total notional of SEK 19.7 million, one foreign exchange forward derivative to buy SEK with a total notional of SEK 4.1 million, one foreign exchange forward derivative to sell Norwegian Krone (“NOK”) with a notional of NOK 1.3 million and one foreign exchange forward to sell Danish Krone (“DKK”) with a notional of DKK 3.2 million that were not designated as hedges in qualifying hedging relationships. Also as of March 31, 2015, there were 58 interest rate swaps where the Company is paying fixed rates, with maturities ranging from 2 to 10 years and a total notional amount of $445.9 million, three interest rate swaps where the Company is receiving fixed rates with maturities ranging from 1 to 10 years and a total notional of $12.3 million and eleven credit index instruments with a total notional amount of $40.0 million. | |||||||||||||
The table below presents the fair value of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014 (amounts in thousands): | |||||||||||||
Fair Value of Derivatives in an | Fair Value of Derivatives in a | ||||||||||||
Asset Position(1) As of | Liability Position(2) As of | ||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | ||||||||||
Derivatives designated as hedging instruments: | |||||||||||||
Interest rate swaps | $ | 30 | $ | 138 | $ | 389 | $ | 235 | |||||
Total derivatives designated as hedging instruments | 30 | 138 | 389 | 235 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||
Interest rate swaps | 1,037 | 1,128 | 11,226 | 5,216 | |||||||||
Foreign exchange contracts | 56,796 | 24,388 | 255 | 15 | |||||||||
Credit index instruments | 738 | 974 | 75 | 10 | |||||||||
Total derivatives not designated as hedging instruments | 58,571 | 26,490 | 11,556 | 5,241 | |||||||||
Total derivatives | $ | 58,601 | $ | 26,628 | $ | 11,945 | $ | 5,476 | |||||
-1 | Classified as derivative assets in our condensed consolidated balance sheets. | ||||||||||||
-2 | Classified as derivative liabilities in our condensed consolidated balance sheets. | ||||||||||||
The tables below present the effect of our derivative financial instruments on the condensed consolidated statements of operations and of comprehensive income for the three months ended March 31, 2015 and 2014: | |||||||||||||
Gain (Loss) | |||||||||||||
Gain (Loss) | Reclassified | Gain (Loss) | |||||||||||
Derivatives Designated as | Recognized | from AOCI | Recognized | ||||||||||
Hedging Instruments | in OCI | into Income | in Income | Location of Gain (Loss) | |||||||||
for the Three Months Ended March 31, | (effective portion) | (effective portion) | (ineffective portion) | Recognized in Income | |||||||||
2015 | $ | -467 | $ | -204 | $ | — | Interest expense | ||||||
2014 | $ | -251 | $ | -373 | $ | — | Interest expense | ||||||
Amount of Gain (Loss) | |||||||||||||
Recognized in Income for the | |||||||||||||
Derivatives Not Designated | Three Months Ended March 31, | ||||||||||||
as Hedging Instruments | Location of Gain (Loss) Recognized in Income | 2015 | 2014 | ||||||||||
Interest rate swaps | Gain (loss) on derivative financial instruments | $ | -12,923 | $ | -4,197 | ||||||||
Foreign exchange contracts | Gain (loss) on derivative financial instruments | 37,972 | -3,047 | ||||||||||
Credit index instruments | Gain (loss) on derivative financial instruments | -426 | -622 | ||||||||||
$ | 24,623 | $ | -7,866 | ||||||||||
Offsetting_Assets_and_Liabilit
Offsetting Assets and Liabilities | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Offsetting Assets and Liabilities | |||||||||||||||||||
Offsetting Assets and Liabilities | |||||||||||||||||||
12. Offsetting Assets and Liabilities | |||||||||||||||||||
The following tables present the potential effects of netting arrangements on our financial position for financial assets and liabilities within the scope of ASC 210-20, Balance Sheet—Offsetting, which for us are derivative assets and liabilities as well as repurchase agreement liabilities (amounts in thousands): | |||||||||||||||||||
(iv) | |||||||||||||||||||
Gross Amounts Not | |||||||||||||||||||
Offset in the Statement | |||||||||||||||||||
(ii) | (iii) =bsp;(i) - (ii) | of Financial Position | |||||||||||||||||
Gross Amounts | Net Amounts | Cash | |||||||||||||||||
(i) | Offset in the | Presented in | Collateral | ||||||||||||||||
Gross Amounts | Statement of | the Statement of | Financial | Received / | (v) =bsp;(iii) - (iv) | ||||||||||||||
Recognized | Financial Position | Financial Position | Instruments | Pledged | Net Amount | ||||||||||||||
As of March 31, 2015 | |||||||||||||||||||
Derivative assets | $ | 58,601 | $ | — | $ | 58,601 | $ | 804 | $ | — | $ | 57,797 | |||||||
Derivative liabilities | $ | 11,945 | $ | — | $ | 11,945 | $ | 804 | $ | 11,141 | $ | — | |||||||
Repurchase agreements | 2,764,319 | — | 2,764,319 | 2,764,319 | — | — | |||||||||||||
$ | 2,776,264 | $ | — | $ | 2,776,264 | $ | 2,765,123 | $ | 11,141 | $ | — | ||||||||
As of December 31, 2014 | |||||||||||||||||||
Derivative assets | $ | 26,628 | $ | — | $ | 26,628 | $ | 2,016 | $ | — | $ | 24,612 | |||||||
Derivative liabilities | $ | 5,476 | $ | — | $ | 5,476 | $ | 2,016 | $ | 3,460 | $ | — | |||||||
Repurchase agreements | 2,270,985 | — | 2,270,985 | 2,270,985 | — | — | |||||||||||||
$ | 2,276,461 | $ | — | $ | 2,276,461 | $ | 2,273,001 | $ | 3,460 | $ | — | ||||||||
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2015 | |
Variable Interest Entities | |
Variable Interest Entities | |
13. Variable Interest Entities | |
Investment Securities | |
As discussed in Note 2, we evaluate all of our investments and other interests in entities for consolidation, including our investments in CMBS and our retained interests in securitization transactions we initiated, all of which are generally considered to be variable interests in VIEs. | |
The VIEs consolidated in accordance with ASC 810 are structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to the certificate holders. The assets and other instruments held by these securitization entities are restricted and can only be used to fulfill the obligations of the entity. Additionally, the obligations of the securitization entities do not have any recourse to the general credit of any other consolidated entities, nor to us as the primary beneficiary. The VIE liabilities initially represent investment securities on our balance sheet (pre-consolidation). Upon consolidation of these VIEs, our associated investment securities are eliminated, as is the interest income related to those securities. Similarly, the fees we earn in our roles as special servicer of the bonds issued by the consolidated VIEs or as collateral administrator of the consolidated VIEs are also eliminated. Finally, an allocable portion of the identified servicing intangible associated with the eliminated fee streams is eliminated in consolidation. | |
VIEs in which we are the Primary Beneficiary | |
The inclusion of the assets and liabilities of VIEs in which we are deemed the primary beneficiary has no economic effect on us. Our exposure to the obligations of VIEs is generally limited to our investment in these entities. We are not obligated to provide, nor have we provided, any financial support for any of these consolidated structures. | |
VIEs in which we are not the Primary Beneficiary | |
In certain instances, we hold a variable interest in a VIE in the form of CMBS, but either (i) we are not appointed, or do not serve as, special servicer or (ii) an unrelated third party has the rights to unilaterally remove us as special servicer. In these instances, we do not have the power to direct activities that most significantly impact the VIE’s economic performance. In other cases, the variable interest we hold does not obligate us to absorb losses or provide us with the right to receive benefits from the VIE which could potentially be significant. For these structures, we are not deemed to be the primary beneficiary of the VIE, and we do not consolidate these VIEs. | |
As of March 31, 2015, one of our CDO structures was in default, which pursuant to the underlying indentures, changes the rights of the variable interest holders. Upon default of a CDO, the trustee or senior note holders are allowed to exercise certain rights, including liquidation of the collateral, which at that time, is the activity which would most significantly impact the CDO’s economic performance. Further, when the CDO is in default, the collateral administrator no longer has the option to purchase securities from the CDO. In cases where the CDO is in default and we do not have the ability to exercise rights which would most significantly impact the CDO’s economic performance, we do not consolidate the VIE. As of March 31, 2015, this CDO structure was not consolidated. During the three months ended March 31, 2014, one of our CDOs, which was previously in default as of December 31, 2013, ceased to be in default. This event triggered the initial consolidation of the CDO and its underlying assets during the three months ended March 31, 2014. | |
As noted above, we are not obligated to provide, nor have we provided, any financial support for any of our securitization VIEs, whether or not we are deemed to be the primary beneficiary. As such, the risk associated with our involvement in these VIEs is limited to the carrying value of our investment in the entity. As of March 31, 2015, our maximum risk of loss related to VIEs in which we were not the primary beneficiary was $213.3 million on a fair value basis. | |
As of March 31, 2015, the securitization VIEs which we do not consolidate had debt obligations to beneficial interest holders with unpaid principal balances of $46.0 billion. The corresponding assets are comprised primarily of commercial mortgage loans with unpaid principal balances corresponding to the amounts of the outstanding debt obligations. | |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Stockholders' Equity | |||||||||||||
Stockholders' Equity | 15. Stockholders’ Equity | ||||||||||||
During the three months ended March 31, 2015 our board of directors declared the following dividend: | |||||||||||||
Declare Date | Record Date | Ex-Dividend Date | Payment Date | Amount | Frequency | ||||||||
2/25/15 | 3/31/15 | 3/27/15 | 4/15/15 | $ | 0.48 | Quarterly | |||||||
Subsequent to March 31, 2015, we issued additional common shares under our currently effective shelf registration. Refer to Note 22 herein for further details. | |||||||||||||
During the three months ended March 31, 2015, there were no shares issued under our At-The-Market Equity Offering Sales Agreement (the “ATM Agreement”). During the three months ended March 31, 2015, shares issued under the Starwood Property Trust, Inc. Dividend Reinvestment and Direct Stock Purchase Plan (the “DRIP Plan”) were not material. | |||||||||||||
In September 2014, our board of directors authorized and announced the repurchase of up to $250 million of our outstanding common stock over a period of one year. In December 2014, our board of directors amended the repurchase program to include the repurchase of our outstanding Convertible Notes. During the three months ended March 31, 2015, we repurchased $104.1 million aggregate principal amount of our 2019 Notes for $119.9 million (refer to Note 9) and no common stock under the repurchase program. As of March 31, 2015, we have $117.1 million of remaining capacity to repurchase common stock or Convertible Notes under the repurchase program. | |||||||||||||
Equity Incentive Plans | |||||||||||||
The Company currently maintains the Manager Equity Plan, the Starwood Property Trust, Inc. Equity Plan (the “Equity Plan”), and the Starwood Property Trust, Inc. Non-Executive Director Stock Plan (“Non-Executive Director Stock Plan”). Refer to Note 16 to the consolidated financial statements included in our Form 10-K for further information regarding these plans. | |||||||||||||
The table below summarizes our share awards granted under the Manager Equity Plan that were not fully vested as of March 31, 2015 (dollar amounts in thousands): | |||||||||||||
Grant Date | Type | Amount Granted | Grant Date Fair Value | Vesting Period | |||||||||
January 2014 (1) | RSU | 489,281 | $ | 14,776 | 3 years | ||||||||
Jan-14 | RSU | 2,000,000 | 55,420 | 3 years | |||||||||
Oct-12 | RSU | 875,000 | 19,854 | 3 years | |||||||||
-1 | As part of the spin-off of our SFR segment, all holders of the Company’s common stock and vested restricted common stock received one SWAY common share for every five shares of the Company’s common stock. At the time of the spin-off, the Manager held certain unvested RSUs that were not entitled to SWAY shares. Under the legal documentation governing the outstanding RSUs, the Manager was entitled to receive additional RSUs in an amount equal to the number of such outstanding RSUs times the amount received in the spin-off by a holder of a share of the Company’s common stock (i.e., the price per share of a SWAY common share divided by five) divided by the fair market value of a share of the Company’s common stock on the date of the spin-off. In order to prevent dilution of the rights of our equity plan participants resulting from this make-whole issuance, the Equity Plan and Manager Equity Plan provide for, and, on August 12, 2014, our board of directors authorized, an increase of 489,281 shares to the maximum number of shares available for issuance under the Equity Plan and Manager Equity Plan. | ||||||||||||
As of March 31, 2015, there were 3.7 million shares available for future grants under the Manager Equity Plan, the Equity Plan and the Non-Executive Director Stock Plan. | |||||||||||||
Schedule of Non-Vested Shares and Share Equivalents | |||||||||||||
Weighted | |||||||||||||
Average | |||||||||||||
Non-Executive | Grant Date | ||||||||||||
Director | Manager | Fair Value | |||||||||||
Stock Plan | Equity Plan | Equity Plan | Total | (per share) | |||||||||
Balance as of January 1, 2015 | 17,105 | 109,708 | 1,854,585 | 1,981,398 | $ | 27.30 | |||||||
Granted | — | 123,492 | — | 123,492 | 24.17 | ||||||||
Vested | — | -14,538 | -286,278 | -300,816 | 26.73 | ||||||||
Forfeited | — | -1,007 | — | -1,007 | 24.11 | ||||||||
Balance as of March 31, 2015 | 17,105 | 217,655 | 1,568,307 | 1,803,067 | 27.18 | ||||||||
Earnings_per_Share
Earnings per Share | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings per Share | |||||||
Earnings per Share | |||||||
16. Earnings per Share | |||||||
The following table provides a reconciliation of net income from continuing operations and the number of shares of common stock used in the computations of basic EPS and diluted EPS (in thousands, except per share amounts): | |||||||
For the Three Months Ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
Basic Earnings | |||||||
Continuing Operations: | |||||||
Income from continuing operations attributable to STWD common shareholders | $ | 120,363 | $ | 122,152 | |||
Less: Income attributable to unvested shares | -972 | -1,748 | |||||
Basic — Income from continuing operations | $ | 119,391 | $ | 120,404 | |||
Discontinued Operations: | |||||||
Loss from discontinued operations | $ | — | $ | -1,551 | |||
Basic — Net income attributable to STWD common shareholders after allocation to participating securities | $ | 119,391 | $ | 118,853 | |||
Diluted Earnings | |||||||
Continuing Operations: | |||||||
Basic — Income from continuing operations attributable to STWD common shareholders | $ | 120,363 | $ | 122,152 | |||
Less: Income attributable to unvested shares | -972 | -1,748 | |||||
Add: Undistributed earnings to unvested shares | 106 | 366 | |||||
Less: Undistributed earnings reallocated to unvested shares | -104 | -361 | |||||
Diluted — Income from continuing operations | $ | 119,393 | $ | 120,409 | |||
Discontinued Operations: | |||||||
Basic — Loss from discontinued operations | $ | — | $ | -1,551 | |||
Diluted — Net income attributable to STWD common shareholders after allocation to participating securities | $ | 119,393 | $ | 118,858 | |||
Number of Shares: | |||||||
Basic — Average shares outstanding | 223,541 | 195,524 | |||||
Effect of dilutive securities — Convertible Notes | 5,353 | 3,196 | |||||
Effect of dilutive securities — Contingently Issuable Shares | 138 | 156 | |||||
Diluted — Average shares outstanding | 229,032 | 198,876 | |||||
Earnings Per Share Attributable to STWD Common Stockholders: | |||||||
Basic: | |||||||
Income from continuing operations | $ | 0.53 | $ | 0.62 | |||
Loss from discontinued operations | — | -0.01 | |||||
Net income | $ | 0.53 | $ | 0.61 | |||
Diluted: | |||||||
Income from continuing operations | $ | 0.52 | $ | 0.61 | |||
Loss from discontinued operations | — | -0.01 | |||||
Net income | $ | 0.52 | $ | 0.60 | |||
As of March 31, 2015 and 2014, unvested restricted shares of 1.8 million and 2.9 million, respectively, were excluded from the computation of diluted shares as their effect was already considered under the more dilutive two-class method used above. | |||||||
Also as of March 31, 2015, there were 62.4 million potential shares of common stock contingently issuable upon the conversion of the Convertible Notes. The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As a result, this principal amount, representing 57.0 million shares at March 31, 2015, was not included in the computation of diluted EPS. However, as discussed in Note 9, the conversion options associated with each of the 2017 Notes, 2018 Notes and 2019 Notes are “in-the-money” as the if-converted value of those Convertible Notes exceeded their respective principal amounts by $6.1 million, $61.5 million and $61.1 million, respectively, at March 31, 2015. The dilutive effect to EPS is determined by dividing this “conversion spread value” by the average share price. The “conversion spread value” is the value that would be delivered to investors in shares based on the terms of the Convertible Notes, upon an assumed conversion. In calculating the dilutive effect of these shares, the treasury stock method was used and resulted in a dilution of 5.4 million shares for the three months ended March 31, 2015. | |||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Accumulated Other Comprehensive Income | |||||||||||||
Accumulated Other Comprehensive Income | 17. Accumulated Other Comprehensive Income | ||||||||||||
The changes in AOCI by component are as follows (in thousands): | |||||||||||||
Cumulative | |||||||||||||
Unrealized Gain | |||||||||||||
Effective Portion of | (Loss) on | Foreign | |||||||||||
Cumulative Loss on | Available-for- | Currency | |||||||||||
Cash Flow Hedges | Sale Securities | Translation | Total | ||||||||||
Three Months Ended March 31, 2015 | |||||||||||||
Balance at January 1, 2015 | $ | -97 | $ | 60,190 | $ | -4,197 | $ | 55,896 | |||||
OCI before reclassifications | -467 | -2,567 | -8,308 | -11,342 | |||||||||
Amounts reclassified from AOCI | 204 | -5,396 | — | -5,192 | |||||||||
Net period OCI | -263 | -7,963 | -8,308 | -16,534 | |||||||||
Balance at March 31, 2015 | $ | -360 | $ | 52,227 | $ | -12,505 | $ | 39,362 | |||||
Three Months Ended March 31, 2014 | |||||||||||||
Balance at January 1, 2014 | $ | -604 | $ | 66,566 | $ | 9,487 | $ | 75,449 | |||||
OCI before reclassifications | -251 | 3,983 | 1,046 | 4,778 | |||||||||
Amounts reclassified from AOCI | 373 | -485 | — | -112 | |||||||||
Net period OCI | 122 | 3,498 | 1,046 | 4,666 | |||||||||
Balance at March 31, 2014 | $ | -482 | $ | 70,064 | $ | 10,533 | $ | 80,115 | |||||
The reclassifications out of AOCI impacted the condensed consolidated statements of operations for the three months ended March 31, 2015 and 2014 as follows: | |||||||||||||
Amounts Reclassified from | |||||||||||||
AOCI during the Three Months | Affected Line Item | ||||||||||||
Ended March 31, | in the Statements | ||||||||||||
Details about AOCI Components | 2015 | 2014 | of Operations | ||||||||||
Losses on cash flow hedges: | |||||||||||||
Interest rate contracts | $ | -204 | $ | -373 | Interest expense | ||||||||
Unrealized gains (losses) on available for sale securities: | |||||||||||||
Interest realized upon collection | 5,396 | — | Interest income from investment securities | ||||||||||
Net realized gain on sale of investments | — | 698 | Gain on sale of investments and other assets, net | ||||||||||
OTTI | — | -213 | OTTI | ||||||||||
Total | 5,396 | 485 | |||||||||||
Total reclassifications for the period | $ | 5,192 | $ | 112 | |||||||||
Fair_Value
Fair Value | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||
Fair Value | 18. Fair Value | |||||||||||||||||||||
GAAP establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring financial assets and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: | ||||||||||||||||||||||
Level I—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. | ||||||||||||||||||||||
Level II—Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. | ||||||||||||||||||||||
Level III—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. | ||||||||||||||||||||||
Valuation Process | ||||||||||||||||||||||
We have valuation control processes in place to validate the fair value of the Company’s financial assets and liabilities measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. Refer to Note 20 to the consolidated financial statements included in our Form 10-K for further discussion of our valuation process. | ||||||||||||||||||||||
We determine the fair value of our assets and liabilities measured at fair value on a recurring and nonrecurring basis in accordance with the methodology described in our Form 10-K. | ||||||||||||||||||||||
The following tables present our financial assets and liabilities carried at fair value on a recurring basis in the condensed consolidated balance sheets by their level in the fair value hierarchy as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||
Total | Level I | Level II | Level III | |||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 343,770 | $ | — | $ | — | $ | 343,770 | ||||||||||||||
RMBS | 197,385 | — | — | 197,385 | ||||||||||||||||||
CMBS | 308,195 | — | — | 308,195 | ||||||||||||||||||
Equity security | 14,045 | 14,045 | — | — | ||||||||||||||||||
Domestic servicing rights | 130,761 | — | — | 130,761 | ||||||||||||||||||
Derivative assets | 58,601 | — | 58,601 | — | ||||||||||||||||||
VIE assets | 103,363,978 | — | — | 103,363,978 | ||||||||||||||||||
Total | $ | 104,416,735 | $ | 14,045 | $ | 58,601 | $ | 104,344,089 | ||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Derivative liabilities | $ | 11,945 | $ | — | $ | 11,945 | $ | — | ||||||||||||||
VIE liabilities | 102,708,732 | — | 100,563,274 | 2,145,458 | ||||||||||||||||||
Total | $ | 102,720,677 | $ | — | $ | 100,575,219 | $ | 2,145,458 | ||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
Total | Level I | Level II | Level III | |||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 391,620 | $ | — | $ | — | $ | 391,620 | ||||||||||||||
RMBS | 207,053 | — | — | 207,053 | ||||||||||||||||||
CMBS | 334,080 | — | — | 334,080 | ||||||||||||||||||
Equity security | 15,120 | 15,120 | — | — | ||||||||||||||||||
Domestic servicing rights | 132,303 | — | — | 132,303 | ||||||||||||||||||
Derivative assets | 26,628 | — | 26,628 | — | ||||||||||||||||||
VIE assets | 107,816,065 | — | — | 107,816,065 | ||||||||||||||||||
Total | $ | 108,922,869 | $ | 15,120 | $ | 26,628 | $ | 108,881,121 | ||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Derivative liabilities | $ | 5,476 | $ | — | $ | 5,476 | $ | — | ||||||||||||||
VIE liabilities | 107,232,201 | — | 102,339,081 | 4,893,120 | ||||||||||||||||||
Total | $ | 107,237,677 | $ | — | $ | 102,344,557 | $ | 4,893,120 | ||||||||||||||
The changes in financial assets and liabilities classified as Level III were as follows for the three months ended March 31, 2015 and 2014 (amounts in thousands): | ||||||||||||||||||||||
Domestic | ||||||||||||||||||||||
Loans | Servicing | VIE | ||||||||||||||||||||
Three Months Ended March 31, 2015 | Held‑for‑sale | RMBS | CMBS | Rights | VIE Assets | Liabilities | Total | |||||||||||||||
January 1, 2015 balance | $ | 391,620 | $ | 207,053 | $ | 334,080 | $ | 132,303 | $ | 107,816,065 | $ | -4,893,120 | $ | 103,988,001 | ||||||||
Total realized and unrealized (losses) gains: | ||||||||||||||||||||||
Included in earnings: | ||||||||||||||||||||||
Change in fair value / gain on sale | 21,131 | — | -160 | -1,542 | -8,847,854 | 2,460,672 | -6,367,753 | |||||||||||||||
OTTI | — | — | — | — | — | — | — | |||||||||||||||
Net accretion | — | 9,445 | — | — | — | — | 9,445 | |||||||||||||||
Included in OCI | — | -7,626 | -5,216 | — | — | — | -12,842 | |||||||||||||||
Purchases / Originations | 413,221 | — | 8,738 | — | — | — | 421,959 | |||||||||||||||
Sales | -482,009 | — | -4,713 | — | — | — | -486,722 | |||||||||||||||
Issuances | — | — | — | — | — | -6,763 | -6,763 | |||||||||||||||
Cash repayments / receipts | -193 | -11,487 | -225 | — | — | 47,936 | 36,031 | |||||||||||||||
Transfers into Level III | — | — | — | — | — | -192,481 | -192,481 | |||||||||||||||
Transfers out of Level III | — | — | — | — | — | 549,370 | 549,370 | |||||||||||||||
Consolidations of VIEs | — | — | -24,309 | — | 4,413,608 | -111,072 | 4,278,227 | |||||||||||||||
Deconsolidations of VIEs | — | — | — | — | -17,841 | — | -17,841 | |||||||||||||||
March 31, 2015 balance | $ | 343,770 | $ | 197,385 | $ | 308,195 | $ | 130,761 | $ | 103,363,978 | $ | -2,145,458 | $ | 102,198,631 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at March 31, 2015 | $ | 4,788 | $ | 3,952 | $ | -1,101 | $ | -1,542 | $ | -8,847,854 | $ | 2,460,672 | $ | -6,381,085 | ||||||||
Domestic | ||||||||||||||||||||||
Loans | Servicing | VIE | ||||||||||||||||||||
Three Months Ended March 31, 2014 | Held‑for‑sale | RMBS | CMBS | Rights | VIE Assets | Liabilities | Total | |||||||||||||||
January 1, 2014 balance | $ | 206,672 | $ | 296,236 | $ | 208,006 | $ | 150,149 | $ | 103,151,624 | $ | -1,597,984 | $ | 102,414,703 | ||||||||
Total realized and unrealized gains: | ||||||||||||||||||||||
Included in earnings: | ||||||||||||||||||||||
Change in fair value / gain on sale | 20,893 | 1,011 | 5,207 | -5,251 | -3,681,541 | 101,499 | -3,558,182 | |||||||||||||||
OTTI | — | -213 | — | — | — | — | -213 | |||||||||||||||
Net accretion | — | 6,564 | — | — | — | — | 6,564 | |||||||||||||||
Included in OCI | — | 4,748 | -533 | — | — | — | 4,215 | |||||||||||||||
Purchases / Originations | 261,825 | — | 3,831 | — | — | — | 265,656 | |||||||||||||||
Sales | -302,461 | -9,310 | -15,844 | — | — | — | -327,615 | |||||||||||||||
Issuances | — | — | — | — | — | -45,761 | -45,761 | |||||||||||||||
Cash repayments / receipts | -92 | -7,819 | -408 | — | — | 35,366 | 27,047 | |||||||||||||||
Transfers into Level III | — | — | 47,300 | — | — | -571,612 | -524,312 | |||||||||||||||
Transfers out of Level III | -112,720 | — | -179 | — | — | 419,741 | 306,842 | |||||||||||||||
Consolidations of VIEs | — | — | -6,715 | — | 20,270,649 | -1,824,171 | 18,439,763 | |||||||||||||||
Deconsolidations of VIEs | — | — | — | — | -1,289,214 | — | -1,289,214 | |||||||||||||||
March 31, 2014 balance | $ | 74,117 | $ | 291,217 | $ | 240,665 | $ | 144,898 | $ | 118,451,518 | $ | -3,482,922 | $ | 115,719,493 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at March 31, 2014 | $ | 177 | $ | 6,295 | $ | 5,207 | $ | -5,251 | $ | -3,681,541 | $ | 101,499 | $ | -3,573,614 | ||||||||
Amounts were transferred from Level II to Level III due to a decrease in the observable relevant market activity and amounts were transferred from Level III to Level II due to an increase in the observable relevant market activity. | ||||||||||||||||||||||
The following table presents the fair values (all Level III) of our financial instruments not carried at fair value on the consolidated balance sheets (amounts in thousands): | ||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||||||||
Value | Value | Value | Value | |||||||||||||||||||
Financial assets not carried at fair value: | ||||||||||||||||||||||
Loans held-for-investment and loans transferred as secured borrowings | $ | 6,135,825 | $ | 6,258,516 | $ | 5,908,665 | 6,034,838 | |||||||||||||||
Securities, held-to-maturity | 501,686 | 499,255 | 441,995 | 440,629 | ||||||||||||||||||
European servicing rights | 8,041 | 11,205 | 11,849 | 12,741 | ||||||||||||||||||
Financial liabilities not carried at fair value: | ||||||||||||||||||||||
Secured financing agreements and secured borrowings on transferred loans | $ | 3,806,834 | $ | 3,799,857 | $ | 3,267,230 | 3,251,035 | |||||||||||||||
Convertible senior notes | 1,324,125 | 1,354,314 | 1,418,022 | 1,444,975 | ||||||||||||||||||
The following is quantitative information about significant unobservable inputs in our Level III measurements for those assets and liabilities measured at fair value on a recurring basis (dollar amounts in thousands): | ||||||||||||||||||||||
Carrying Value at | Valuation | Unobservable | Range as of (1) | |||||||||||||||||||
31-Mar-15 | Technique | Input | 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||
Loans held-for-sale, fair value option | $ | 343,770 | Discounted cash flow | Yield (b) | 4.0% - 4.5% | 4.2% - 4.9% | ||||||||||||||||
Duration (c) | 5.0 - 11.0 years | 5.0 - 10.0 years | ||||||||||||||||||||
RMBS | 197,385 | Discounted cash flow | Constant prepayment rate (a) | 3.3% - 15.3% | 1.2% - 15.9% | |||||||||||||||||
Constant default rate (b) | 1.1% - 9.0% | 1.1% - 8.9% | ||||||||||||||||||||
Loss severity (b) | 15% - 81% (e) | 15% - 80% (e) | ||||||||||||||||||||
Delinquency rate (c) | 2% - 31% | 2% - 43% | ||||||||||||||||||||
Servicer advances (a) | 31% - 88% | 14% - 75% | ||||||||||||||||||||
Annual coupon deterioration (b) | 0% - 0.5% | 0% - 0.6% | ||||||||||||||||||||
Putback amount per projected total collateral loss (d) | 0% - 16% | 0% - 11% | ||||||||||||||||||||
CMBS | 308,195 | Discounted cash flow | Yield (b) | 0% - 240.8% | 0% - 421.4% | |||||||||||||||||
Duration (c) | 0 - 13.7 years | 0 - 11.8 years | ||||||||||||||||||||
Domestic servicing rights | 130,761 | Discounted cash flow | Debt yield (a) | 8.25% | 8.25% | |||||||||||||||||
Discount rate (b) | 15% | 15% | ||||||||||||||||||||
Control migration (b) | 0% - 80% | 0% - 80% | ||||||||||||||||||||
VIE assets | 103,363,978 | Discounted cash flow | Yield (b) | 0% - 910.1% | 0% - 925.0% | |||||||||||||||||
Duration (c) | 0 - 20.1 years | 0 - 21.0 years | ||||||||||||||||||||
VIE liabilities | 2,145,458 | Discounted cash flow | Yield (b) | 0% - 910.1% | 0% - 925.0% | |||||||||||||||||
Duration (c) | 0 - 20.1 years | 0 - 21.0 years | ||||||||||||||||||||
-1 | The ranges of significant unobservable inputs are represented in percentages and years. | |||||||||||||||||||||
Sensitivity of the Fair Value to Changes in the Unobservable Inputs | ||||||||||||||||||||||
(a) | Significant increase (decrease) in the unobservable input in isolation would result in a significantly higher (lower) fair value measurement. | |||||||||||||||||||||
(b) | Significant increase (decrease) in the unobservable input in isolation would result in a significantly lower (higher) fair value measurement. | |||||||||||||||||||||
(c) | Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question. | |||||||||||||||||||||
(d) | Any delay in the putback recovery date leads to a decrease in fair value, for the majority of securities in our RMBS portfolio. | |||||||||||||||||||||
(e) | 82% and 85% of the portfolio falls within a range of 45%-80% as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Income Taxes | |||||||||||||
Income Taxes | |||||||||||||
19. Income Taxes | |||||||||||||
Certain of our subsidiaries have elected to be treated as taxable REIT subsidiaries (“TRSs”). TRSs permit us to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, we will continue to maintain our qualification as a REIT. | |||||||||||||
Our TRSs engage in various real estate related operations, including special servicing of commercial real estate, originating and securitizing commercial mortgage loans, and investing in entities which engage in real estate related operations. The majority of our TRSs are held within the Investing and Servicing Segment. As of March 31, 2015 and December 31, 2014, approximately $1.0 billion of the Investing and Servicing Segment’s assets were owned by TRS entities, including $152.3 million and $88.6 million in cash, respectively. Our TRSs are not consolidated for federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by us with respect to our interest in TRSs. | |||||||||||||
Our income tax provision consisted of the following for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||||||
For the Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Current | |||||||||||||
Federal | $ | 11,506 | $ | 5,140 | |||||||||
Foreign | 1,036 | 1,449 | |||||||||||
State | 1,955 | 870 | |||||||||||
Total current | 14,497 | 7,459 | |||||||||||
Deferred | |||||||||||||
Federal | 1,959 | -704 | |||||||||||
Foreign | -789 | -1,006 | |||||||||||
State | 284 | -129 | |||||||||||
Total deferred | 1,454 | -1,839 | |||||||||||
Total income tax provision | $ | 15,951 | $ | 5,620 | |||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are presented net by tax jurisdiction and are reported in other assets and other liabilities, respectively. At March 31, 2015 and December 31, 2014, our U.S. tax jurisdiction was in a net deferred tax asset position, while our European tax jurisdiction was in a net deferred tax liability position. The following table presents each of these tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities (in thousands): | |||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||
U.S. | |||||||||||||
Deferred tax asset, net | |||||||||||||
Reserves and accruals | $ | 11,563 | $ | 13,818 | |||||||||
Domestic intangible assets | 8,963 | 9,617 | |||||||||||
Investment securities and loans | -2,394 | -2,327 | |||||||||||
Investment in unconsolidated entities | 1,436 | 883 | |||||||||||
Deferred income | 433 | 427 | |||||||||||
Net operating and capital loss carryforwards | 3,753 | 2,498 | |||||||||||
Valuation allowance | -3,753 | -2,498 | |||||||||||
Other U.S. temporary differences | 689 | 515 | |||||||||||
20,690 | 22,933 | ||||||||||||
Europe | |||||||||||||
Deferred tax liability, net | |||||||||||||
European servicing rights | -1,801 | -2,681 | |||||||||||
Net operating and capital loss carryforwards | 7,867 | 8,702 | |||||||||||
Valuation allowance | -7,867 | -8,702 | |||||||||||
Other European temporary differences | -262 | -337 | |||||||||||
-2,063 | -3,018 | ||||||||||||
Net deferred tax assets (liabilities) | $ | 18,627 | $ | 19,915 | |||||||||
Unrecognized tax benefits were not material as of and during the three months ended March 31, 2015. | |||||||||||||
The following table is a reconciliation of our federal income tax determined using our statutory federal tax rate to our reported income tax provision for the three months ended March 31, 2015 and 2014 (dollar amounts in thousands): | |||||||||||||
For the Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Federal statutory tax rate | $ | 47,856 | 35.0 | % | $ | 44,275 | 35.0 | % | |||||
REIT and other non-taxable income | -34,972 | -25.6 | % | -40,382 | -32 | % | |||||||
State income taxes | 2,001 | 1.5 | % | 450 | 0.4 | % | |||||||
Federal benefit of state tax deduction | -700 | -0.5 | % | -158 | -0.1 | % | |||||||
Valuation allowance | 1,255 | 0.9 | % | 1,512 | 1.2 | % | |||||||
Other | 511 | 0.4 | % | -77 | -0.1 | % | |||||||
Effective tax rate | $ | 15,951 | 11.7 | % | $ | 5,620 | 4.4 | % | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies. | |
Commitments and Contingencies | |
20. Commitments and Contingencies | |
As of March 31, 2015, we had future funding commitments on 58 loans totaling $2.0 billion, of which we expect to fund $1.7 billion. These future funding commitments primarily relate to construction projects, capital improvements, tenant improvements and leasing commissions. Generally, funding commitments are subject to certain conditions that must be met, such as customary construction draw certifications, minimum debt service coverage ratios or executions of new leases before advances are made to the borrower. | |
In the ordinary course of business, we provide various forms of guarantees. In certain instances, particularly with loans involving multiple construction lenders, the Company has guaranteed the future funding obligations of third party lenders in the event that such third parties fail to fund their proportionate share of the obligation in a timely manner. We are currently unaware of any circumstances which would require us to make payments under any of these guarantees. | |
Management is not aware of any other contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on our condensed consolidated financial statements. | |
Segment_Data
Segment Data | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Segment Data | ||||||||||||||||||||||
Segment Data | 21. Segment Data | |||||||||||||||||||||
In its operation of the business, management, including our chief operating decision maker, who is our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis prior to the impact of consolidating VIEs under ASC 810. The segment information within this note is reported on that basis. During the three months ended March 31, 2015, we established a separate presentation for corporate overhead which includes our corporate debt facilities and the associated expenses, management fee expenses and general and administrative expenses not directly allocable to our segments. Also during the three months ended March 31, 2015, we transferred a performing loan with a balance of $25.0 million as of December 31, 2014 from our Investing and Servicing Segment to the Lending Segment. We have retrospectively reclassified prior periods to conform to this presentation. | ||||||||||||||||||||||
The table below presents our results of operations for the three months ended March 31, 2015 by business segment (amounts in thousands): | ||||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | and Servicing | ||||||||||||||||||||
Segment | Segment | Corporate | Subtotal | VIEs | Total | |||||||||||||||||
Revenues: | ||||||||||||||||||||||
Interest income from loans | $ | 113,472 | $ | 4,957 | $ | — | $ | 118,429 | $ | — | $ | 118,429 | ||||||||||
Interest income from investment securities | 22,296 | 24,696 | — | 46,992 | -19,248 | 27,744 | ||||||||||||||||
Servicing fees | 84 | 50,948 | — | 51,032 | -22,775 | 28,257 | ||||||||||||||||
Other revenues | 79 | 4,602 | — | 4,681 | -262 | 4,419 | ||||||||||||||||
Total revenues | 135,931 | 85,203 | — | 221,134 | -42,285 | 178,849 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Management fees | 388 | 18 | 27,512 | 27,918 | 50 | 27,968 | ||||||||||||||||
Interest expense | 21,523 | 2,119 | 26,892 | 50,534 | — | 50,534 | ||||||||||||||||
General and administrative | 4,860 | 29,189 | 1,029 | 35,078 | 186 | 35,264 | ||||||||||||||||
Acquisition and investment pursuit costs | 773 | 213 | 200 | 1,186 | — | 1,186 | ||||||||||||||||
Depreciation and amortization | — | 4,085 | — | 4,085 | — | 4,085 | ||||||||||||||||
Loan loss allowance, net | 317 | — | — | 317 | — | 317 | ||||||||||||||||
Other expense | — | 2,073 | — | 2,073 | — | 2,073 | ||||||||||||||||
Total costs and expenses | 27,861 | 37,697 | 55,633 | 121,191 | 236 | 121,427 | ||||||||||||||||
Income before other income, income taxes and non-controlling interests | 108,070 | 47,506 | -55,633 | 99,943 | -42,521 | 57,422 | ||||||||||||||||
Other income: | ||||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 47,861 | 47,861 | ||||||||||||||||
Change in fair value of servicing rights | — | -4,875 | — | -4,875 | 3,333 | -1,542 | ||||||||||||||||
Change in fair value of investment securities, net | -339 | 8,313 | — | 7,974 | -8,473 | -499 | ||||||||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | 21,131 | — | 21,131 | — | 21,131 | ||||||||||||||||
Earnings from unconsolidated entities | 3,496 | 2,724 | — | 6,220 | -130 | 6,090 | ||||||||||||||||
Gain on sale of investments and other assets, net | 98 | 17,100 | — | 17,198 | — | 17,198 | ||||||||||||||||
Gain (loss) on derivative financial instruments, net | 32,630 | -8,007 | — | 24,623 | — | 24,623 | ||||||||||||||||
Foreign currency (loss), net | -29,136 | -1,171 | — | -30,307 | — | -30,307 | ||||||||||||||||
Loss on extinguishment of debt | — | — | -5,292 | -5,292 | — | -5,292 | ||||||||||||||||
Other income, net | — | 31 | 14 | 45 | — | 45 | ||||||||||||||||
Total other income (loss) | 6,749 | 35,246 | -5,278 | 36,717 | 42,591 | 79,308 | ||||||||||||||||
Income (loss) before income taxes | 114,819 | 82,752 | -60,911 | 136,660 | 70 | 136,730 | ||||||||||||||||
Income tax benefit (provision) | 30 | -15,981 | — | -15,951 | — | -15,951 | ||||||||||||||||
Net income (loss) | 114,849 | 66,771 | -60,911 | 120,709 | 70 | 120,779 | ||||||||||||||||
Net income attributable to non-controlling interests | -346 | — | — | -346 | -70 | -416 | ||||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 114,503 | $ | 66,771 | $ | -60,911 | $ | 120,363 | $ | — | $ | 120,363 | ||||||||||
The table below presents our results of operations for the three months ended March 31, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | Single Family | and Servicing | |||||||||||||||||||
Segment | Segment | Corporate | Residential | Subtotal | VIEs | Total | ||||||||||||||||
Revenues: | ||||||||||||||||||||||
Interest income from loans | $ | 102,087 | $ | 2,823 | $ | — | $ | — | $ | 104,910 | $ | — | $ | 104,910 | ||||||||
Interest income from investment securities | 18,289 | 23,008 | — | — | 41,297 | -11,843 | 29,454 | |||||||||||||||
Servicing fees | 37 | 56,185 | — | — | 56,222 | -22,011 | 34,211 | |||||||||||||||
Other revenues | 80 | 3,597 | — | — | 3,677 | -273 | 3,404 | |||||||||||||||
Total revenues | 120,493 | 85,613 | — | — | 206,106 | -34,127 | 171,979 | |||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Management fees | 627 | 18 | 27,138 | — | 27,783 | 38 | 27,821 | |||||||||||||||
Interest expense | 15,826 | 951 | 21,054 | — | 37,831 | — | 37,831 | |||||||||||||||
General and administrative | 5,145 | 39,349 | 1,421 | — | 45,915 | 186 | 46,101 | |||||||||||||||
Acquisition and investment pursuit costs | 212 | 182 | — | — | 394 | — | 394 | |||||||||||||||
Depreciation and amortization | — | 4,636 | — | — | 4,636 | — | 4,636 | |||||||||||||||
Loan loss allowance, net | 497 | — | — | — | 497 | — | 497 | |||||||||||||||
Other expense | -14 | 1,703 | — | — | 1,689 | — | 1,689 | |||||||||||||||
Total costs and expenses | 22,293 | 46,839 | 49,613 | — | 118,745 | 224 | 118,969 | |||||||||||||||
Income before other income, income taxes and non-controlling interests | 98,200 | 38,774 | -49,613 | — | 87,361 | -34,351 | 53,010 | |||||||||||||||
Other income: | ||||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | — | 56,004 | 56,004 | |||||||||||||||
Change in fair value of servicing rights | — | -12,175 | — | — | -12,175 | 6,924 | -5,251 | |||||||||||||||
Change in fair value of investment securities, net | -156 | 36,952 | — | — | 36,796 | -28,435 | 8,361 | |||||||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | 20,893 | — | — | 20,893 | — | 20,893 | |||||||||||||||
Earnings (loss) from unconsolidated entities | 1,540 | -1,383 | — | — | 157 | -93 | 64 | |||||||||||||||
Gain on sale of investments, net | 1,555 | — | — | — | 1,555 | — | 1,555 | |||||||||||||||
Loss on derivative financial instruments, net | -2,788 | -5,078 | — | — | -7,866 | — | -7,866 | |||||||||||||||
Foreign currency gain (loss), net | 1,561 | -84 | — | — | 1,477 | — | 1,477 | |||||||||||||||
OTTI | -213 | — | — | — | -213 | — | -213 | |||||||||||||||
Other income, net | 18 | — | — | — | 18 | — | 18 | |||||||||||||||
Total other income | 1,517 | 39,125 | — | — | 40,642 | 34,400 | 75,042 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 99,717 | 77,899 | -49,613 | — | 128,003 | 49 | 128,052 | |||||||||||||||
Income tax provision | -83 | -5,537 | — | — | -5,620 | — | -5,620 | |||||||||||||||
Income (loss) from continuing operations | 99,634 | 72,362 | -49,613 | — | 122,383 | 49 | 122,432 | |||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | -1,551 | -1,551 | — | -1,551 | |||||||||||||||
Net income (loss) | 99,634 | 72,362 | -49,613 | -1,551 | 120,832 | 49 | 120,881 | |||||||||||||||
Net income attributable to non-controlling interests | -231 | — | — | — | -231 | -49 | -280 | |||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 99,403 | $ | 72,362 | $ | -49,613 | $ | -1,551 | $ | 120,601 | $ | — | $ | 120,601 | ||||||||
The table below presents our condensed consolidated balance sheet as of March 31, 2015 by business segment (amounts in thousands): | ||||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | and Servicing | ||||||||||||||||||||
Segment | Segment | Corporate | Subtotal | VIEs | Total | |||||||||||||||||
Assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 94,136 | $ | 142,976 | $ | 122,953 | $ | 360,065 | $ | 655 | $ | 360,720 | ||||||||||
Restricted cash | 20,232 | 19,336 | — | 39,568 | — | 39,568 | ||||||||||||||||
Loans held-for-investment, net | 6,037,731 | 3,094 | — | 6,040,825 | — | 6,040,825 | ||||||||||||||||
Loans held-for-sale, at fair value | — | 343,770 | — | 343,770 | — | 343,770 | ||||||||||||||||
Loans transferred as secured borrowings | 95,000 | — | — | 95,000 | — | 95,000 | ||||||||||||||||
Investment securities | 808,025 | 806,876 | — | 1,614,901 | -593,590 | 1,021,311 | ||||||||||||||||
Intangible assets—servicing rights | — | 181,524 | — | 181,524 | -42,722 | 138,802 | ||||||||||||||||
Investment in unconsolidated entities | 165,830 | 50,855 | — | 216,685 | -6,852 | 209,833 | ||||||||||||||||
Goodwill | — | 140,437 | — | 140,437 | — | 140,437 | ||||||||||||||||
Derivative assets | 54,812 | 3,789 | — | 58,601 | — | 58,601 | ||||||||||||||||
Accrued interest receivable | 38,050 | 1,071 | — | 39,121 | — | 39,121 | ||||||||||||||||
Other assets | 38,081 | 78,512 | 13,866 | 130,459 | -1,611 | 128,848 | ||||||||||||||||
VIE assets, at fair value | — | — | — | — | 103,363,978 | 103,363,978 | ||||||||||||||||
Total Assets | $ | 7,351,897 | $ | 1,772,240 | $ | 136,819 | $ | 9,260,956 | $ | 102,719,858 | $ | 111,980,814 | ||||||||||
Liabilities and Equity | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 19,210 | $ | 77,386 | $ | 15,863 | $ | 112,459 | $ | 495 | $ | 112,954 | ||||||||||
Related-party payable | — | 3,562 | 24,111 | 27,673 | — | 27,673 | ||||||||||||||||
Dividends payable | — | — | 108,435 | 108,435 | — | 108,435 | ||||||||||||||||
Derivative liabilities | 7,128 | 4,817 | — | 11,945 | — | 11,945 | ||||||||||||||||
Secured financing agreements, net | 2,665,075 | 385,417 | 661,342 | 3,711,834 | — | 3,711,834 | ||||||||||||||||
Convertible senior notes, net | — | — | 1,324,125 | 1,324,125 | — | 1,324,125 | ||||||||||||||||
Secured borrowings on transferred loans | 95,000 | — | — | 95,000 | — | 95,000 | ||||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 102,708,732 | 102,708,732 | ||||||||||||||||
Total Liabilities | 2,786,413 | 471,182 | 2,133,876 | 5,391,471 | 102,709,227 | 108,100,698 | ||||||||||||||||
Equity: | ||||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||||
Common stock | — | — | 2,255 | 2,255 | — | 2,255 | ||||||||||||||||
Additional paid-in capital | 3,042,637 | 1,263,796 | -469,393 | 3,837,040 | — | 3,837,040 | ||||||||||||||||
Treasury stock | — | — | -23,635 | -23,635 | — | -23,635 | ||||||||||||||||
Accumulated other comprehensive income | 42,676 | -3,314 | — | 39,362 | — | 39,362 | ||||||||||||||||
Retained earnings (accumulated deficit) | 1,468,258 | 40,576 | -1,506,284 | 2,550 | — | 2,550 | ||||||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 4,553,571 | 1,301,058 | -1,997,057 | 3,857,572 | — | 3,857,572 | ||||||||||||||||
Non-controlling interests in consolidated subsidiaries | 11,913 | — | — | 11,913 | 10,631 | 22,544 | ||||||||||||||||
Total Equity | 4,565,484 | 1,301,058 | -1,997,057 | 3,869,485 | 10,631 | 3,880,116 | ||||||||||||||||
Total Liabilities and Equity | $ | 7,351,897 | $ | 1,772,240 | $ | 136,819 | $ | 9,260,956 | $ | 102,719,858 | $ | 111,980,814 | ||||||||||
The table below presents our condensed consolidated balance sheet as of December 31, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | and Servicing | ||||||||||||||||||||
Segment | Segment | Corporate | Subtotal | VIEs | Total | |||||||||||||||||
Assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 125,132 | $ | 85,252 | $ | 44,017 | $ | 254,401 | $ | 786 | $ | 255,187 | ||||||||||
Restricted cash | 34,941 | 13,763 | — | 48,704 | — | 48,704 | ||||||||||||||||
Loans held-for-investment, net | 5,771,307 | 7,931 | — | 5,779,238 | — | 5,779,238 | ||||||||||||||||
Loans held-for-sale, at fair value | — | 391,620 | — | 391,620 | — | 391,620 | ||||||||||||||||
Loans transferred as secured borrowings | 129,427 | — | — | 129,427 | — | 129,427 | ||||||||||||||||
Investment securities | 764,517 | 753,553 | — | 1,518,070 | -519,822 | 998,248 | ||||||||||||||||
Intangible assets-servicing rights | — | 190,207 | — | 190,207 | -46,055 | 144,152 | ||||||||||||||||
Investment in unconsolidated entities | 152,012 | 48,693 | — | 200,705 | -6,722 | 193,983 | ||||||||||||||||
Goodwill | — | 140,437 | — | 140,437 | — | 140,437 | ||||||||||||||||
Derivative assets | 23,579 | 3,049 | — | 26,628 | — | 26,628 | ||||||||||||||||
Accrued interest receivable | 39,188 | 914 | — | 40,102 | — | 40,102 | ||||||||||||||||
Other assets | 21,329 | 100,902 | 14,739 | 136,970 | -1,464 | 135,506 | ||||||||||||||||
VIE assets, at fair value | — | — | — | — | 107,816,065 | 107,816,065 | ||||||||||||||||
Total Assets | $ | 7,061,432 | $ | 1,736,321 | $ | 58,756 | $ | 8,856,509 | $ | 107,242,788 | $ | 116,099,297 | ||||||||||
Liabilities and Equity | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 23,014 | $ | 97,424 | $ | 23,621 | $ | 144,059 | $ | 457 | $ | 144,516 | ||||||||||
Related-party payable | — | 4,405 | 36,346 | 40,751 | — | 40,751 | ||||||||||||||||
Dividends payable | 1 | — | 108,188 | 108,189 | — | 108,189 | ||||||||||||||||
Derivative liabilities | 3,662 | 1,814 | — | 5,476 | — | 5,476 | ||||||||||||||||
Secured financing agreements, net | 2,252,493 | 222,363 | 662,933 | 3,137,789 | — | 3,137,789 | ||||||||||||||||
Convertible senior notes, net | — | — | 1,418,022 | 1,418,022 | — | 1,418,022 | ||||||||||||||||
Secured borrowings on transferred loans | 129,441 | — | — | 129,441 | — | 129,441 | ||||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 107,232,201 | 107,232,201 | ||||||||||||||||
Total Liabilities | 2,408,611 | 326,006 | 2,249,110 | 4,983,727 | 107,232,658 | 112,216,385 | ||||||||||||||||
Equity: | ||||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||||
Common stock | — | — | 2,248 | 2,248 | — | 2,248 | ||||||||||||||||
Additional paid-in capital | 3,254,144 | 1,413,608 | -832,027 | 3,835,725 | — | 3,835,725 | ||||||||||||||||
Treasury stock | — | — | -23,635 | -23,635 | — | -23,635 | ||||||||||||||||
Accumulated other comprehensive income | 55,781 | 115 | — | 55,896 | — | 55,896 | ||||||||||||||||
Accumulated deficit | 1,330,970 | -3,408 | -1,336,940 | -9,378 | — | -9,378 | ||||||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 4,640,895 | 1,410,315 | -2,190,354 | 3,860,856 | — | 3,860,856 | ||||||||||||||||
Non-controlling interests in consolidated subsidiaries | 11,926 | — | — | 11,926 | 10,130 | 22,056 | ||||||||||||||||
Total Equity | 4,652,821 | 1,410,315 | -2,190,354 | 3,872,782 | 10,130 | 3,882,912 | ||||||||||||||||
Total Liabilities and Equity | $ | 7,061,432 | $ | 1,736,321 | $ | 58,756 | $ | 8,856,509 | $ | 107,242,788 | $ | 116,099,297 | ||||||||||
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events | |
Subsequent Events | 22. Subsequent Events |
Our significant events subsequent to March 31, 2015 were as follows: | |
Issuance of Common Shares | |
On April 20, 2015, we issued 12.0 million shares of common stock for gross proceeds of $283.6 million. In connection with this offering, the underwriters had a 30-day option to purchase an additional 1.8 million shares of common stock, which they exercised in full, resulting in additional gross proceeds of $42.5 million. | |
Secured Financing Agreement | |
On April 27, 2015, we amended the Lender 4 Repo 1 facility to reduce pricing. | |
Dividend Declaration | |
On May 5, 2015, our board of directors declared a dividend of $0.48 per share for the second quarter of 2015, which is payable on July 15, 2015 to common stockholders of record as of June 30, 2015. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies | |
Basis of Accounting and Principles of Consolidation | Basis of Accounting and Principles of Consolidation |
The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries and VIEs. Intercompany amounts have been eliminated in consolidation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows have been included. | |
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the operating results for the full year. | |
Refer to our Form 10-K for a description of our recurring accounting policies. We have included disclosure in this Note 2 regarding principles of consolidation and other accounting policies that (i) are required to be disclosed quarterly, (ii) we view as critical, or (iii) became significant since December 31, 2014 due to a corporate action or increase in the significance of the underlying business activity. | |
Variable Interest Entities | Variable Interest Entities |
We evaluate all of our interests in VIEs for consolidation. When our interests are determined to be variable interests, we assess whether we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Accounting Standards Codification (“ASC”) 810, Consolidation, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. We consider our variable interests as well as any variable interests of our related parties in making this determination. Where both of these factors are present, we are deemed to be the primary beneficiary and we consolidate the VIE. Where either one of these factors is not present, we are not the primary beneficiary and do not consolidate the VIE. | |
To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. | |
To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that we apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by us. | |
Our purchased investment securities include CMBS which are unrated and non-investment grade rated securities issued by CMBS trusts. In certain cases, we may contract to provide special servicing activities for these CMBS trusts, or, as holder of the controlling class, we may have the right to name and remove the special servicer for these trusts. In our role as special servicer, we provide services on defaulted loans within the trusts, such as foreclosure or work-out procedures, as permitted by the underlying contractual agreements. In exchange for these services, we receive a fee. These rights give us the ability to direct activities that could significantly impact the trust’s economic performance. However, in those instances where an unrelated third party has the right to unilaterally remove us as special servicer, we do not have the power to direct activities that most significantly impact the trust’s economic performance. We evaluated all of our positions in such investments for consolidation. | |
For VIEs in which we are determined to be the primary beneficiary, all of the underlying assets, liabilities and equity of the structures are recorded on our books, and the initial investment, along with any associated unrealized holding gains and losses, are eliminated in consolidation. Similarly, the interest income earned from these structures, as well as the fees paid by these trusts to us in our capacity as special servicer, are eliminated in consolidation. Further, an allocable portion of the identified servicing intangible asset associated with the servicing fee streams, and the corresponding allocable amortization or change in fair value of the servicing intangible asset, are also eliminated in consolidation. | |
We perform ongoing reassessments of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding our involvement with a VIE causes our consolidation conclusion regarding the VIE to change. | |
We separately present the assets and liabilities of our consolidated VIEs as individual line items on our consolidated balance sheets. The assets of consolidated VIEs consist of loans and foreclosed loans which have been temporarily converted into real estate owned. These assets are presented in the aggregate because they are similar in nature and can only be used to settle the obligations of the consolidated VIEs. There is no recourse to the general credit of the Company for the obligations of our consolidated VIEs. | |
We elect the fair value option for initial and subsequent recognition of the assets and liabilities of our consolidated VIEs. Interest income and interest expense associated with these VIEs are no longer relevant on a standalone basis because these amounts are already reflected in the fair value changes. We have elected to present these items in a single line on our condensed consolidated statements of operations. The residual difference shown on our condensed consolidated statements of operations in the line item “Income of consolidated VIEs, net” represents our beneficial interest in the VIEs. | |
Convertible Senior Notes | Convertible Senior Notes |
ASC 470, Debt, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. The equity components of the convertible notes have been reflected within additional paid-in capital in our condensed consolidated balance sheets. The resulting debt discount is being amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. | |
Upon repurchase of convertible debt instruments, ASC 470-20 requires the issuer to allocate total settlement consideration inclusive of transaction costs amongst the liability and equity components of the instrument based on the fair value of the liability component immediately prior to repurchase. The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component including unamortized debt issuance costs is recognized as gain (loss) on debt extinguishment in our condensed consolidated statements of operations. The remaining settlement consideration allocated to the equity component is recognized as a reduction of additional paid-in capital in our condensed consolidated balance sheets. | |
Discontinued Operations | Discontinued Operations |
On January 31, 2014, we completed the spin-off of our former SFR segment to our stockholders as discussed in Note 1. In accordance with ASC 205, Presentation of Financial Statements, the results of the SFR segment are presented within discontinued operations in our condensed consolidated statements of operations for the three months ended March 31, 2014. | |
Fair Value Option | Fair Value Option |
The guidance in ASC 825, Financial Instruments, provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our consolidated balance sheets from those instruments using another accounting method. | |
We have elected the fair value option for eligible financial assets and liabilities of our consolidated VIEs, loans held-for-sale originated by the Investing and Servicing Segment’s conduit platform, purchased CMBS issued by VIEs we could consolidate in the future and certain investments in marketable equity securities. The fair value elections for VIE and securitization related items were made in order to mitigate accounting mismatches between the carrying value of the instruments and the related assets and liabilities that we consolidate at fair value. The fair value elections for mortgage loans held-for-sale originated by the Investing and Servicing Segment’s conduit platform were made due to the short-term nature of these instruments. The fair value elections for investments in marketable equity securities were made because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market. | |
Fair Value Measurements | Fair Value Measurements |
We measure our mortgage‑backed securities, derivative assets and liabilities, domestic servicing rights intangible asset and any assets or liabilities where we have elected the fair value option at fair value. When actively quoted observable prices are not available, we either use implied pricing from similar assets and liabilities or valuation models based on net present values of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. | |
As discussed above, we measure the assets and liabilities of consolidated VIEs at fair value pursuant to our election of the fair value option. The VIEs in which we invest are “static”; that is, no reinvestment is permitted, and there is no active management of the underlying assets. In determining the fair value of the assets and liabilities of the VIE, we maximize the use of observable inputs over unobservable inputs. We also acknowledge that our principal market for selling CMBS assets is the securitization market where the market participant is considered to be a CMBS trust or a collateralized debt obligation (“CDO”). This methodology results in the fair value of the assets of a static CMBS trust being equal to the fair value of its liabilities. Refer to Note 18 for further information regarding our fair value measurements. | |
Loans Receivable and Provision for Loan Losses | Loans Receivable and Provision for Loan Losses |
In our Lending Segment we purchase and originate commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Actual losses, if any, could ultimately differ from these estimates. | |
We perform a quarterly review of our portfolio of loans. In connection with this review, we assess the performance of each loan and assign a risk rating based on several factors including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” through “5”, from less risk to greater risk in connection with this review. | |
Earnings Per Share | Earnings Per Share |
We present both basic and diluted earnings per share (“EPS”) amounts in our financial statements. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from (i) our share-based compensation, consisting of unvested restricted stock (“RSAs”) and restricted stock units (“RSUs”), (ii) contingently issuable shares to our Manager; and (iii) the “in-the-money” conversion options associated with our outstanding convertible notes (see further discussion in Note 16). Potential dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period. | |
The Company’s unvested RSUs and RSAs contain rights to receive non-forfeitable dividends and thus are participating securities. Due to the existence of these participating securities, the two-class method of computing EPS is required, unless another method is determined to be more dilutive. Under the two-class method, undistributed earnings are reallocated between shares of common stock and participating securities. For the three months ended March 31, 2015 and 2014, the two-class method resulted in the most dilutive EPS calculation. | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant and subjective estimate that we make is the projection of cash flows we expect to receive on our loans, investment securities and intangible assets, which has a significant impact on the amounts of interest income, credit losses (if any), and fair values that we record and/or disclose. In addition, the fair value of financial assets and liabilities that are estimated using a discounted cash flows method is significantly impacted by the rates at which we estimate market participants would discount the expected cash flows. | |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Acquisitions and Divestitures | |||||
Summary of consolidated results of discontinued operations for the SFR segment prior to the spin-off | The following table presents the summarized consolidated results of discontinued operations for the SFR segment prior to the spin-off (in thousands): | ||||
For the Three Months Ended | |||||
31-Mar-14 | |||||
Total revenues | $ | 3,876 | |||
Total costs and expenses | 6,369 | ||||
Loss before other income and income taxes | -2,493 | ||||
Total other income | 942 | ||||
Loss before income taxes | -1,551 | ||||
Income tax provision | — | ||||
Net loss | $ | -1,551 | |||
Investment_Securities_Tables
Investment Securities (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Investment Securities | |||||||||||||||||||||||||
Schedule of investment securities | Investment securities were comprised of the following as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||||||||||||||
Carrying Value as of | |||||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
RMBS, available-for-sale | $ | 197,385 | $ | 207,053 | |||||||||||||||||||||
Single-borrower CMBS, available-for-sale | 94,909 | 100,349 | |||||||||||||||||||||||
CMBS, fair value option (1) | 806,876 | 753,553 | |||||||||||||||||||||||
Held-to-maturity (“HTM”) securities | 501,686 | 441,995 | |||||||||||||||||||||||
Equity security, fair value option | 14,045 | 15,120 | |||||||||||||||||||||||
Subtotal—Investment securities | 1,614,901 | 1,518,070 | |||||||||||||||||||||||
VIE eliminations (1) | -593,590 | -519,822 | |||||||||||||||||||||||
Total investment securities | $ | 1,021,311 | $ | 998,248 | |||||||||||||||||||||
-1 | Certain fair value option CMBS are eliminated in consolidation against VIE liabilities pursuant to ASC 810. | ||||||||||||||||||||||||
Schedule of purchases, sales and principal collections for all investment securities | Purchases, sales and principal collections for all investment securities were as follows (amounts in thousands): | ||||||||||||||||||||||||
Available-for-sale | CMBS, fair | HTM | Equity | ||||||||||||||||||||||
RMBS | CMBS | value option | Securities | Security | Total | ||||||||||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||||||||||||||
Purchases | $ | — | $ | — | $ | 8,738 | $ | 58,509 | $ | — | $ | 67,247 | |||||||||||||
Sales | — | — | 4,713 | — | — | 4,713 | |||||||||||||||||||
Principal collections | 11,487 | 224 | 1 | 25 | — | 11,737 | |||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||||
Purchases | $ | — | $ | — | $ | 9,890 | $ | — | $ | — | $ | 9,890 | |||||||||||||
Sales | 9,309 | — | 18,574 | — | — | 27,883 | |||||||||||||||||||
Principal collections | 7,819 | 408 | — | — | — | 8,227 | |||||||||||||||||||
Summary of investments in available-for-sale RMBS and single-borrower CMBS where the fair value option has not been elected | The tables below summarize various attributes of our investments in available-for-sale RMBS and single-borrower CMBS where the fair value option has not been elected as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||||||||||||||
Unrealized Gains or (Losses) | |||||||||||||||||||||||||
Recognized in AOCI | |||||||||||||||||||||||||
Purchase | Recorded | Gross | Gross | Net | |||||||||||||||||||||
Amortized | Credit | Amortized | Non-Credit | Unrealized | Unrealized | Fair Value | |||||||||||||||||||
Cost | OTTI | Cost | OTTI | Gains | Losses | Adjustment | Fair Value | ||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||||||
RMBS | $ | 161,692 | $ | -10,197 | $ | 151,495 | $ | — | $ | 46,069 | $ | -179 | $ | 45,890 | $ | 197,385 | |||||||||
Single-borrower CMBS | 88,908 | — | 88,908 | — | 6,001 | — | 6,001 | 94,909 | |||||||||||||||||
Total | $ | 250,600 | $ | -10,197 | $ | 240,403 | $ | — | $ | 52,070 | $ | -179 | $ | 51,891 | $ | 292,294 | |||||||||
31-Dec-14 | |||||||||||||||||||||||||
RMBS | $ | 163,733 | $ | -10,197 | $ | 153,536 | $ | -197 | $ | 53,714 | $ | — | $ | 53,517 | $ | 207,053 | |||||||||
Single-borrower CMBS | 93,685 | — | 93,685 | — | 6,664 | — | 6,664 | 100,349 | |||||||||||||||||
Total | $ | 257,418 | $ | -10,197 | $ | 247,221 | $ | -197 | $ | 60,378 | $ | — | $ | 60,181 | $ | 307,402 | |||||||||
Weighted Average | Weighted Average | ||||||||||||||||||||||||
Coupon(1) | Rating (Standard & Poor’s) | WAL (Years)(2) | |||||||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||||||
RMBS | 1.1 | % | B− | 5.8 | |||||||||||||||||||||
Single-borrower CMBS | 11.6 | % | B | 0.4 | |||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
RMBS | 1.1 | % | B− | 5.8 | |||||||||||||||||||||
Single-borrower CMBS | 11.6 | % | BB+ | 3.2 | |||||||||||||||||||||
-1 | Calculated using the March 31, 2015 and December 31, 2014 one-month LIBOR rate of 0.176% and 0.171%, respectively, for floating rate securities. | ||||||||||||||||||||||||
-2 | Represents the WAL of each respective group of securities as of the respective balance sheet date. The WAL of each individual security is calculated using projected amounts and projected timing of future principal payments. | ||||||||||||||||||||||||
Reconciliation of aggregate principal balance to amortized cost for RMBS and single-borrower CMBS, excluding CMBS where the fair value option is elected | The following table contains a reconciliation of aggregate principal balance to amortized cost for our RMBS and single-borrower CMBS as of March 31, 2015 and December 31, 2014, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
RMBS | CMBS | RMBS | CMBS | ||||||||||||||||||||||
Principal balance | $ | 258,755 | $ | 88,908 | $ | 270,783 | $ | 93,685 | |||||||||||||||||
Accretable yield | -82,242 | — | -85,495 | — | |||||||||||||||||||||
Non-accretable difference | -25,018 | — | -31,752 | — | |||||||||||||||||||||
Total discount | -107,260 | — | -117,247 | — | |||||||||||||||||||||
Amortized cost | $ | 151,495 | $ | 88,908 | $ | 153,536 | $ | 93,685 | |||||||||||||||||
Schedule of changes to accretable yield and non-accretable difference for RMBS and single-borrower CMBS, excluding CMBS where the fair value option is elected | The following table discloses the changes to accretable yield and non-accretable difference for our RMBS and single-borrower CMBS during the three months ended March 31, 2015 and 2014, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||
Non-Accretable | |||||||||||||||||||||||||
Accretable Yield | Difference | ||||||||||||||||||||||||
Three Months Ended March 31, 2015 | RMBS | CMBS | RMBS | CMBS | |||||||||||||||||||||
Balance as of January 1, 2015 | $ | 85,495 | $ | — | $ | 31,752 | $ | — | |||||||||||||||||
Accretion of discount | -9,445 | — | — | — | |||||||||||||||||||||
Principal write-downs | — | — | -542 | — | |||||||||||||||||||||
Purchases | — | — | — | — | |||||||||||||||||||||
Sales | — | — | — | — | |||||||||||||||||||||
OTTI | — | — | — | — | |||||||||||||||||||||
Transfer to/from non-accretable difference | 6,192 | — | -6,192 | — | |||||||||||||||||||||
Balance as of March 31, 2015 | $ | 82,242 | $ | — | $ | 25,018 | $ | — | |||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||||
Balance as of January 1, 2014 | $ | 101,046 | $ | — | $ | 70,196 | $ | — | |||||||||||||||||
Accretion of discount | -6,564 | — | — | — | |||||||||||||||||||||
Principal write-downs | — | — | -366 | — | |||||||||||||||||||||
Purchases | — | — | — | — | |||||||||||||||||||||
Sales | -1,962 | — | -7,509 | — | |||||||||||||||||||||
OTTI | 213 | — | — | — | |||||||||||||||||||||
Transfer to/from non-accretable difference | 6,889 | — | -6,889 | — | |||||||||||||||||||||
Balance as of March 31, 2014 | $ | 99,622 | $ | — | $ | 55,432 | $ | — | |||||||||||||||||
Schedule of gross unrealized losses and estimated fair value of securities in an unrealized loss position, excluding CMBS where the fair value option is elected | The following table presents the gross unrealized losses and estimated fair value of the available-for-sale securities (i) where we have not elected the fair value option, (ii) that were in an unrealized loss position as of March 31, 2015 and December 31, 2014, and (iii) for which OTTIs (full or partial) have not been recognized in earnings (amounts in thousands): | ||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | ||||||||||||||||||||||||
Securities with a | Securities with a | Securities with a | Securities with a | ||||||||||||||||||||||
loss less than | loss greater than | loss less than | loss greater than | ||||||||||||||||||||||
12 months | 12 months | 12 months | 12 months | ||||||||||||||||||||||
As of March 31, 2015 | |||||||||||||||||||||||||
RMBS | $ | — | $ | 679 | $ | — | $ | -179 | |||||||||||||||||
Single-borrower CMBS | — | — | — | — | |||||||||||||||||||||
Total | $ | — | $ | 679 | $ | — | $ | -179 | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
RMBS | $ | — | $ | 682 | $ | — | $ | -197 | |||||||||||||||||
Single-borrower CMBS | — | — | — | — | |||||||||||||||||||||
Total | $ | — | $ | 682 | $ | — | $ | -197 | |||||||||||||||||
Schedule of investment in fair value option CMBS | The table below summarizes various attributes of our investment in fair value option CMBS as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||||||
Average | Average Rating | WAL | |||||||||||||||||||||||
Coupon | (Standard & Poor’s) (1) | (Years)(2) | |||||||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||||||
CMBS, fair value option | 3.9 | % | CCC | 8.1 | |||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
CMBS, fair value option | 3.9 | % | CCC− | 7.7 | |||||||||||||||||||||
-1 | As of March 31, 2015 and December 31, 2014, excludes $33.8 million and $41.7 million, respectively, in fair value option CMBS that are not rated. | ||||||||||||||||||||||||
-2 | The WAL of each security is calculated based on the period of time over which we expect to receive principal cash flows. Expected principal cash flows are based on contractual payments net of expected losses. | ||||||||||||||||||||||||
Summary of investments in HTM securities | The table below summarizes unrealized gains and losses of our investments in HTM securities as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||||||||||||||
Net Carrying Amount | Gross Unrealized | Gross Unrealized | |||||||||||||||||||||||
(Amortized Cost) | Holding Gains | Holding Losses | Fair Value | ||||||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||||||
Preferred interests | $ | 308,582 | $ | — | $ | -2,370 | $ | 306,212 | |||||||||||||||||
CMBS | 193,104 | 5 | -66 | 193,043 | |||||||||||||||||||||
Total | $ | 501,686 | $ | 5 | $ | -2,436 | $ | 499,255 | |||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Preferred interests | $ | 307,465 | $ | — | $ | -1,366 | $ | 306,099 | |||||||||||||||||
CMBS | 134,530 | — | — | 134,530 | |||||||||||||||||||||
Total | $ | 441,995 | $ | — | $ | -1,366 | $ | 440,629 | |||||||||||||||||
Investment_in_Unconsolidated_E1
Investment in Unconsolidated Entities (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Investment in Unconsolidated Entities | ||||||||||||
Summary of investments in unconsolidated entities | The below table summarizes our investments in unconsolidated entities as of March 31, 2015 and December 31, 2014 (dollar amounts in thousands): | |||||||||||
Carrying value over (under) | ||||||||||||
Participation / | Carrying value as of | equity in net assets as of | ||||||||||
Ownership %(1) | 31-Mar-15 | 31-Dec-14 | March 31, 2015(2) | |||||||||
Equity method: | ||||||||||||
Retail Fund | 33% | $ | 128,308 | $ | 129,475 | $ | — | |||||
Investor entity which owns equity in two real estate services providers | 50% | 21,888 | 21,534 | — | ||||||||
Equity interests in commercial real estate(3) | 16% - 43% | 28,149 | — | — | ||||||||
Bridge loan venture | various | 8,329 | 8,417 | 65 | ||||||||
Various | 25% - 50% | 6,101 | 16,933 | -3,090 | ||||||||
192,775 | 176,359 | $ | -3,025 | |||||||||
Cost method: | ||||||||||||
Investment funds which own equity in a loan servicer and other real estate assets | 4% - 6% | 9,225 | 9,225 | |||||||||
Various | 2% - 10% | 7,833 | 8,399 | |||||||||
17,058 | 17,624 | |||||||||||
$ | 209,833 | $ | 193,983 | |||||||||
-1 | None of these investments are publicly traded and therefore quoted market prices are not available. | |||||||||||
-2 | Differences between the carrying value of our investment and the underlying equity in net assets of the investee are accounted for as if the investee were a consolidated entity in accordance with ASC 323, Investments—Equity Method and Joint Ventures. | |||||||||||
-3 | During the three months ended March 31 2015, we acquired $28.0 million of equity interests in limited liability companies that own ten office and student housing properties throughout the U.S. | |||||||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Goodwill and Intangible Assets | |||||||
Schedule of information about servicing intangibles | The table below presents information about our GAAP servicing intangibles for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||
Domestic servicing rights, at fair value | 2015 | 2014 | |||||
Fair value at January 1 | $ | 132,303 | $ | 150,149 | |||
Changes in fair value due to changes in inputs and assumptions | -1,542 | -5,251 | |||||
Fair value at March 31 | 130,761 | 144,898 | |||||
European servicing rights | |||||||
Net carrying amount at January 1 (fair value of $12.7 million and $29.3 million) | 11,849 | 27,024 | |||||
Foreign exchange (loss) gain | -504 | 145 | |||||
Amortization | -3,304 | -4,011 | |||||
Net carrying value at March 31 (fair value of $11.2 million and $24.4 million) | 8,041 | 23,158 | |||||
Total servicing rights at March 31 | $ | 138,802 | $ | 168,056 | |||
Accumulated amortization at March 31, net of foreign exchange effect | -23,723 | -12,559 | |||||
Secured_Financing_Agreements_T
Secured Financing Agreements (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Secured Financing Agreements. | |||||||||||||||||||||
Summary of secured financing agreements | The following table is a summary of our secured financing agreements in place as of March 31, 2015 and December 31, 2014 (dollars in thousands): | ||||||||||||||||||||
Pledged | |||||||||||||||||||||
Asset | Maximum | Carrying Value at | |||||||||||||||||||
Current | Extended | Carrying | Facility | March 31, | December 31, | ||||||||||||||||
Maturity | Maturity(a) | Pricing | Value | Size | 2015 | 2014 | |||||||||||||||
Lender 1 Repo 1 | (b) | (b) | LIBOR + 1.85% to 5.25% | $ | 1,474,127 | $ | 1,250,000 | $ | 1,040,651 | $ | 875,111 | ||||||||||
Lender 1 Repo 2 | (c) | N/A | LIBOR + 1.90% | 195,032 | 125,000 | 117,125 | 101,886 | ||||||||||||||
Lender 2 Repo 1 | Oct-15 | Oct-18 | LIBOR + 1.75% to 2.75% | 410,800 | 325,000 | 304,596 | 240,188 | ||||||||||||||
Lender 3 Repo 1 | May-17 | May-19 | LIBOR + 2.85% | 177,443 | 123,366 | 123,366 | 124,250 | ||||||||||||||
Conduit Repo 1 | Sep-15 | Sep-16 | LIBOR + 1.90% | 72,603 | 150,000 | 53,513 | 94,727 | ||||||||||||||
Conduit Repo 2 | Nov-15 | Nov-16 | LIBOR + 2.10% | 155,532 | 150,000 | 115,376 | 113,636 | ||||||||||||||
Conduit Repo 3 | Feb-18 | Feb-19 | LIBOR + 2.10% | 96,419 | 150,000 | 70,826 | — | ||||||||||||||
Lender 4 Repo 1 | Oct-15 | Oct-17 | LIBOR + 2.60% | 396,381 | 311,178 | 311,178 | 327,117 | ||||||||||||||
Lender 5 Repo 1 | (d) | N/A | N/A | — | — | — | 58,079 | ||||||||||||||
Lender 6 Repo 1 | Aug-17 | Aug-18 | LIBOR + 2.75% to 3.00% | 572,477 | 500,000 | 398,201 | 296,967 | ||||||||||||||
Lender 7 Repo 1 | Dec-16 | N/A | LIBOR + 2.60% to 2.70% | 50,377 | 39,024 | 39,024 | 39,024 | ||||||||||||||
Lender 8 Mortgage | Nov-24 | N/A | 4.59% | 17,904 | 14,000 | 14,000 | 14,000 | ||||||||||||||
Lender 9 Repo 1 | (e) | (e) | LIBOR + 1.40% to 1.85% | 275,061 | 190,463 | 190,463 | — | ||||||||||||||
Borrowing Base | Sep-15 | Sep-17 | LIBOR + 3.25% | (f) | 1,009,289 | 450,000 | (g) | 272,173 | 189,871 | ||||||||||||
Term Loan | Apr-20 | N/A | LIBOR + 2.75% | (f) | 2,665,096 | 663,347 | 661,342 | (h) | 662,933 | (h) | |||||||||||
$ | 7,568,541 | $ | 4,441,378 | $ | 3,711,834 | $ | 3,137,789 | ||||||||||||||
(a) | Subject to certain conditions as defined in the respective facility agreement. | ||||||||||||||||||||
(b) | Maturity date for borrowings collateralized by loans of January 2017 before extension options and January 2019 assuming initial extension options. | ||||||||||||||||||||
(c) | The date that is 180 days after the buyer delivers notice to seller, subject to a maximum date of March 2017. | ||||||||||||||||||||
(d) | Facility was terminated at our option in March 2015. | ||||||||||||||||||||
(e) | Facility carries a rolling twelve month term which may reset monthly with the lender’s consent. Current maturity is March 2016. Facility carries no maximum borrowing capacity. Amount herein reflects the outstanding balance as of March 31, 2015. | ||||||||||||||||||||
(f) | Subject to borrower’s option to choose alternative benchmark based rates pursuant to the terms of the credit agreement. The Term Loan is also subject to a 75 basis point floor. | ||||||||||||||||||||
(g) | Maximum borrowings under this facility were temporarily increased from $250.0 million to $450.0 million. This increase expires in June 2015. | ||||||||||||||||||||
(h) | Term loan outstanding balance is net of $2.0 million and $2.1 million of unamortized discount as of March 31, 2015 and December 31, 2014. | ||||||||||||||||||||
Schedule of five-year principal repayments for secured financings | The amount reflected in each period includes principal repayments on our credit facilities that would be required if (i) we received the repayments that we expect to receive on the investments that have been pledged as collateral under the credit facilities, as applicable, and (ii) the credit facilities that are expected to have amounts outstanding at their current maturity dates are extended where extension options are available to us (amounts in thousands): | ||||||||||||||||||||
2015 (remainder of) | $ | 539,658 | |||||||||||||||||||
2016 | 212,114 | ||||||||||||||||||||
2017 | 1,088,785 | ||||||||||||||||||||
2018 | 462,317 | ||||||||||||||||||||
2019 | 765,770 | ||||||||||||||||||||
Thereafter(1) | 645,195 | ||||||||||||||||||||
Total | $ | 3,713,839 | |||||||||||||||||||
-1 | Principal paydown of the Term Loan through 2020 excludes $2.0 million of discount amortization. | ||||||||||||||||||||
Convertible_Senior_Notes_Table
Convertible Senior Notes (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Convertible Senior Notes. | ||||||||||||||||
Schedule of the unsecured convertible senior notes outstanding | The following summarizes the unsecured convertible senior notes (collectively, the “Convertible Notes”) outstanding as of March 31, 2015 (amounts in thousands, except rates): | |||||||||||||||
Remaining | ||||||||||||||||
Principal | Coupon | Effective | Conversion | Maturity | Period of | |||||||||||
Amount | Rate | Rate(1) | Rate(2) | Date | Amortization | |||||||||||
2017 Notes | $ | 431,250 | 3.75 | % | 5.87 | % | 41.7397 | 10/15/17 | 2.5 | years | ||||||
2018 Notes | $ | 599,981 | 4.55 | % | 6.10 | % | 45.3639 | 3/1/18 | 2.9 | years | ||||||
2019 Notes | $ | 355,872 | 4.00 | % | 5.37 | % | 48.2112 | 1/15/19 | 3.8 | years | ||||||
As of | As of | |||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Total principal | $ | 1,387,103 | $ | 1,491,228 | ||||||||||||
Net unamortized discount | -62,978 | -73,206 | ||||||||||||||
Carrying amount of debt components | $ | 1,324,125 | $ | 1,418,022 | ||||||||||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | $ | 48,401 | $ | 64,070 | ||||||||||||
-1 | Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in-capital. | |||||||||||||||
-2 | The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of Convertible Notes converted, as adjusted in accordance with the applicable indentures as a result of the spin-off of the SFR segment and cash dividend payments. The if-converted value of the 2017 Notes, 2018 Notes and 2019 Notes exceeded their principal amount by $6.1 million, $61.5 million and $61.1 million, respectively, at March 31, 2015 since the closing market price of the Company’s common stock of $24.30 per share exceeded the implicit conversion prices of $23.96, $22.04 and $20.74 per share, respectively. The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As a result, conversion of this principal amount, totaling 57.0 million shares, was not included in the computation of diluted earnings per share (“EPS”). However, the conversion spread value for the Convertible Notes, representing 5.4 million shares, was included in the computation of diluted EPS as the notes were “in-the-money”. See further discussion at Note 16. | |||||||||||||||
Loan_SecuritizationSale_Activi1
Loan Securitization/Sale Activities (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Loan Securitization/Sale Activities | |||||||||||||
Summary of loans sold and loans transferred as secured borrowings by the Real Estate Lending segment net of expenses | The following table summarizes our loans sold and loans transferred as secured borrowings by the Lending Segment net of expenses (in thousands): | ||||||||||||
Loan Transfers | |||||||||||||
Loan Transfers Accounted | Accounted for as Secured | ||||||||||||
for as Sales | Borrowings | ||||||||||||
Face Amount | Proceeds | Face Amount | Proceeds | ||||||||||
For the Three Months Ended March 31, | |||||||||||||
2015 | $ | 85,500 | $ | 85,121 | $ | — | $ | — | |||||
2014 | 147,884 | 146,400 | — | — | |||||||||
Derivatives_and_Hedging_Activi1
Derivatives and Hedging Activity (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Derivatives and Hedging Activity | |||||||||||||
Schedule of fair values of derivative financial instruments | The table below presents the fair value of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||
Fair Value of Derivatives in an | Fair Value of Derivatives in a | ||||||||||||
Asset Position(1) As of | Liability Position(2) As of | ||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | ||||||||||
Derivatives designated as hedging instruments: | |||||||||||||
Interest rate swaps | $ | 30 | $ | 138 | $ | 389 | $ | 235 | |||||
Total derivatives designated as hedging instruments | 30 | 138 | 389 | 235 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||
Interest rate swaps | 1,037 | 1,128 | 11,226 | 5,216 | |||||||||
Foreign exchange contracts | 56,796 | 24,388 | 255 | 15 | |||||||||
Credit index instruments | 738 | 974 | 75 | 10 | |||||||||
Total derivatives not designated as hedging instruments | 58,571 | 26,490 | 11,556 | 5,241 | |||||||||
Total derivatives | $ | 58,601 | $ | 26,628 | $ | 11,945 | $ | 5,476 | |||||
-1 | Classified as derivative assets in our condensed consolidated balance sheets. | ||||||||||||
-2 | Classified as derivative liabilities in our condensed consolidated balance sheets. | ||||||||||||
Schedule of effect of derivative financial instruments on the consolidated statements of operations and of comprehensive income | |||||||||||||
Gain (Loss) | |||||||||||||
Gain (Loss) | Reclassified | Gain (Loss) | |||||||||||
Derivatives Designated as | Recognized | from AOCI | Recognized | ||||||||||
Hedging Instruments | in OCI | into Income | in Income | Location of Gain (Loss) | |||||||||
for the Three Months Ended March 31, | (effective portion) | (effective portion) | (ineffective portion) | Recognized in Income | |||||||||
2015 | $ | -467 | $ | -204 | $ | — | Interest expense | ||||||
2014 | $ | -251 | $ | -373 | $ | — | Interest expense | ||||||
Schedule of Gain / (Loss) recognized in Income for Derivatives Not Designated as Hedging Instruments | |||||||||||||
Amount of Gain (Loss) | |||||||||||||
Recognized in Income for the | |||||||||||||
Derivatives Not Designated | Three Months Ended March 31, | ||||||||||||
as Hedging Instruments | Location of Gain (Loss) Recognized in Income | 2015 | 2014 | ||||||||||
Interest rate swaps | Gain (loss) on derivative financial instruments | $ | -12,923 | $ | -4,197 | ||||||||
Foreign exchange contracts | Gain (loss) on derivative financial instruments | 37,972 | -3,047 | ||||||||||
Credit index instruments | Gain (loss) on derivative financial instruments | -426 | -622 | ||||||||||
$ | 24,623 | $ | -7,866 | ||||||||||
Offsetting_Assets_and_Liabilit1
Offsetting Assets and Liabilities (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Offsetting Assets and Liabilities | |||||||||||||||||||
Schedule of offsetting assets and liabilities | The following tables present the potential effects of netting arrangements on our financial position for financial assets and liabilities within the scope of ASC 210-20, Balance Sheet—Offsetting, which for us are derivative assets and liabilities as well as repurchase agreement liabilities (amounts in thousands): | ||||||||||||||||||
(iv) | |||||||||||||||||||
Gross Amounts Not | |||||||||||||||||||
Offset in the Statement | |||||||||||||||||||
(ii) | (iii) =bsp;(i) - (ii) | of Financial Position | |||||||||||||||||
Gross Amounts | Net Amounts | Cash | |||||||||||||||||
(i) | Offset in the | Presented in | Collateral | ||||||||||||||||
Gross Amounts | Statement of | the Statement of | Financial | Received / | (v) =bsp;(iii) - (iv) | ||||||||||||||
Recognized | Financial Position | Financial Position | Instruments | Pledged | Net Amount | ||||||||||||||
As of March 31, 2015 | |||||||||||||||||||
Derivative assets | $ | 58,601 | $ | — | $ | 58,601 | $ | 804 | $ | — | $ | 57,797 | |||||||
Derivative liabilities | $ | 11,945 | $ | — | $ | 11,945 | $ | 804 | $ | 11,141 | $ | — | |||||||
Repurchase agreements | 2,764,319 | — | 2,764,319 | 2,764,319 | — | — | |||||||||||||
$ | 2,776,264 | $ | — | $ | 2,776,264 | $ | 2,765,123 | $ | 11,141 | $ | — | ||||||||
As of December 31, 2014 | |||||||||||||||||||
Derivative assets | $ | 26,628 | $ | — | $ | 26,628 | $ | 2,016 | $ | — | $ | 24,612 | |||||||
Derivative liabilities | $ | 5,476 | $ | — | $ | 5,476 | $ | 2,016 | $ | 3,460 | $ | — | |||||||
Repurchase agreements | 2,270,985 | — | 2,270,985 | 2,270,985 | — | — | |||||||||||||
$ | 2,276,461 | $ | — | $ | 2,276,461 | $ | 2,273,001 | $ | 3,460 | $ | — | ||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Stockholders' Equity | |||||||||||||
Schedule of dividends declared by board of directors | |||||||||||||
Declare Date | Record Date | Ex-Dividend Date | Payment Date | Amount | Frequency | ||||||||
2/25/15 | 3/31/15 | 3/27/15 | 4/15/15 | $ | 0.48 | Quarterly | |||||||
Summary of share awards granted under the Manager Equity Plan | The table below summarizes our share awards granted under the Manager Equity Plan that were not fully vested as of March 31, 2015 (dollar amounts in thousands): | ||||||||||||
Grant Date | Type | Amount Granted | Grant Date Fair Value | Vesting Period | |||||||||
January 2014 (1) | RSU | 489,281 | $ | 14,776 | 3 years | ||||||||
Jan-14 | RSU | 2,000,000 | 55,420 | 3 years | |||||||||
Oct-12 | RSU | 875,000 | 19,854 | 3 years | |||||||||
-1 | As part of the spin-off of our SFR segment, all holders of the Company’s common stock and vested restricted common stock received one SWAY common share for every five shares of the Company’s common stock. At the time of the spin-off, the Manager held certain unvested RSUs that were not entitled to SWAY shares. Under the legal documentation governing the outstanding RSUs, the Manager was entitled to receive additional RSUs in an amount equal to the number of such outstanding RSUs times the amount received in the spin-off by a holder of a share of the Company’s common stock (i.e., the price per share of a SWAY common share divided by five) divided by the fair market value of a share of the Company’s common stock on the date of the spin-off. In order to prevent dilution of the rights of our equity plan participants resulting from this make-whole issuance, the Equity Plan and Manager Equity Plan provide for, and, on August 12, 2014, our board of directors authorized, an increase of 489,281 shares to the maximum number of shares available for issuance under the Equity Plan and Manager Equity Plan. | ||||||||||||
Schedule of Non-Vested Shares and Share Equivalents | |||||||||||||
Weighted | |||||||||||||
Average | |||||||||||||
Non-Executive | Grant Date | ||||||||||||
Director | Manager | Fair Value | |||||||||||
Stock Plan | Equity Plan | Equity Plan | Total | (per share) | |||||||||
Balance as of January 1, 2015 | 17,105 | 109,708 | 1,854,585 | 1,981,398 | $ | 27.30 | |||||||
Granted | — | 123,492 | — | 123,492 | 24.17 | ||||||||
Vested | — | -14,538 | -286,278 | -300,816 | 26.73 | ||||||||
Forfeited | — | -1,007 | — | -1,007 | 24.11 | ||||||||
Balance as of March 31, 2015 | 17,105 | 217,655 | 1,568,307 | 1,803,067 | 27.18 | ||||||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings per Share | |||||||
Reconciliation of net income from continuing operations and the number of shares of common stock used in the computation of basic EPS and diluted EPS | The following table provides a reconciliation of net income from continuing operations and the number of shares of common stock used in the computations of basic EPS and diluted EPS (in thousands, except per share amounts): | ||||||
For the Three Months Ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
Basic Earnings | |||||||
Continuing Operations: | |||||||
Income from continuing operations attributable to STWD common shareholders | $ | 120,363 | $ | 122,152 | |||
Less: Income attributable to unvested shares | -972 | -1,748 | |||||
Basic — Income from continuing operations | $ | 119,391 | $ | 120,404 | |||
Discontinued Operations: | |||||||
Loss from discontinued operations | $ | — | $ | -1,551 | |||
Basic — Net income attributable to STWD common shareholders after allocation to participating securities | $ | 119,391 | $ | 118,853 | |||
Diluted Earnings | |||||||
Continuing Operations: | |||||||
Basic — Income from continuing operations attributable to STWD common shareholders | $ | 120,363 | $ | 122,152 | |||
Less: Income attributable to unvested shares | -972 | -1,748 | |||||
Add: Undistributed earnings to unvested shares | 106 | 366 | |||||
Less: Undistributed earnings reallocated to unvested shares | -104 | -361 | |||||
Diluted — Income from continuing operations | $ | 119,393 | $ | 120,409 | |||
Discontinued Operations: | |||||||
Basic — Loss from discontinued operations | $ | — | $ | -1,551 | |||
Diluted — Net income attributable to STWD common shareholders after allocation to participating securities | $ | 119,393 | $ | 118,858 | |||
Number of Shares: | |||||||
Basic — Average shares outstanding | 223,541 | 195,524 | |||||
Effect of dilutive securities — Convertible Notes | 5,353 | 3,196 | |||||
Effect of dilutive securities — Contingently Issuable Shares | 138 | 156 | |||||
Diluted — Average shares outstanding | 229,032 | 198,876 | |||||
Earnings Per Share Attributable to STWD Common Stockholders: | |||||||
Basic: | |||||||
Income from continuing operations | $ | 0.53 | $ | 0.62 | |||
Loss from discontinued operations | — | -0.01 | |||||
Net income | $ | 0.53 | $ | 0.61 | |||
Diluted: | |||||||
Income from continuing operations | $ | 0.52 | $ | 0.61 | |||
Loss from discontinued operations | — | -0.01 | |||||
Net income | $ | 0.52 | $ | 0.60 | |||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Accumulated Other Comprehensive Income | |||||||||||||
Schedule of changes in AOCI by component | The changes in AOCI by component are as follows (in thousands): | ||||||||||||
Cumulative | |||||||||||||
Unrealized Gain | |||||||||||||
Effective Portion of | (Loss) on | Foreign | |||||||||||
Cumulative Loss on | Available-for- | Currency | |||||||||||
Cash Flow Hedges | Sale Securities | Translation | Total | ||||||||||
Three Months Ended March 31, 2015 | |||||||||||||
Balance at January 1, 2015 | $ | -97 | $ | 60,190 | $ | -4,197 | $ | 55,896 | |||||
OCI before reclassifications | -467 | -2,567 | -8,308 | -11,342 | |||||||||
Amounts reclassified from AOCI | 204 | -5,396 | — | -5,192 | |||||||||
Net period OCI | -263 | -7,963 | -8,308 | -16,534 | |||||||||
Balance at March 31, 2015 | $ | -360 | $ | 52,227 | $ | -12,505 | $ | 39,362 | |||||
Three Months Ended March 31, 2014 | |||||||||||||
Balance at January 1, 2014 | $ | -604 | $ | 66,566 | $ | 9,487 | $ | 75,449 | |||||
OCI before reclassifications | -251 | 3,983 | 1,046 | 4,778 | |||||||||
Amounts reclassified from AOCI | 373 | -485 | — | -112 | |||||||||
Net period OCI | 122 | 3,498 | 1,046 | 4,666 | |||||||||
Balance at March 31, 2014 | $ | -482 | $ | 70,064 | $ | 10,533 | $ | 80,115 | |||||
Schedule of reclassifications out of AOCI that impacted the consolidated statements of operations | |||||||||||||
Amounts Reclassified from | |||||||||||||
AOCI during the Three Months | Affected Line Item | ||||||||||||
Ended March 31, | in the Statements | ||||||||||||
Details about AOCI Components | 2015 | 2014 | of Operations | ||||||||||
Losses on cash flow hedges: | |||||||||||||
Interest rate contracts | $ | -204 | $ | -373 | Interest expense | ||||||||
Unrealized gains (losses) on available for sale securities: | |||||||||||||
Interest realized upon collection | 5,396 | — | Interest income from investment securities | ||||||||||
Net realized gain on sale of investments | — | 698 | Gain on sale of investments and other assets, net | ||||||||||
OTTI | — | -213 | OTTI | ||||||||||
Total | 5,396 | 485 | |||||||||||
Total reclassifications for the period | $ | 5,192 | $ | 112 | |||||||||
Fair_Value_Tables
Fair Value (Tables) | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||
Schedule of financial assets and liabilities carried at fair value on a recurring basis | The following tables present our financial assets and liabilities carried at fair value on a recurring basis in the condensed consolidated balance sheets by their level in the fair value hierarchy as of March 31, 2015 and December 31, 2014 (amounts in thousands): | |||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||
Total | Level I | Level II | Level III | |||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 343,770 | $ | — | $ | — | $ | 343,770 | ||||||||||||||
RMBS | 197,385 | — | — | 197,385 | ||||||||||||||||||
CMBS | 308,195 | — | — | 308,195 | ||||||||||||||||||
Equity security | 14,045 | 14,045 | — | — | ||||||||||||||||||
Domestic servicing rights | 130,761 | — | — | 130,761 | ||||||||||||||||||
Derivative assets | 58,601 | — | 58,601 | — | ||||||||||||||||||
VIE assets | 103,363,978 | — | — | 103,363,978 | ||||||||||||||||||
Total | $ | 104,416,735 | $ | 14,045 | $ | 58,601 | $ | 104,344,089 | ||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Derivative liabilities | $ | 11,945 | $ | — | $ | 11,945 | $ | — | ||||||||||||||
VIE liabilities | 102,708,732 | — | 100,563,274 | 2,145,458 | ||||||||||||||||||
Total | $ | 102,720,677 | $ | — | $ | 100,575,219 | $ | 2,145,458 | ||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
Total | Level I | Level II | Level III | |||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 391,620 | $ | — | $ | — | $ | 391,620 | ||||||||||||||
RMBS | 207,053 | — | — | 207,053 | ||||||||||||||||||
CMBS | 334,080 | — | — | 334,080 | ||||||||||||||||||
Equity security | 15,120 | 15,120 | — | — | ||||||||||||||||||
Domestic servicing rights | 132,303 | — | — | 132,303 | ||||||||||||||||||
Derivative assets | 26,628 | — | 26,628 | — | ||||||||||||||||||
VIE assets | 107,816,065 | — | — | 107,816,065 | ||||||||||||||||||
Total | $ | 108,922,869 | $ | 15,120 | $ | 26,628 | $ | 108,881,121 | ||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Derivative liabilities | $ | 5,476 | $ | — | $ | 5,476 | $ | — | ||||||||||||||
VIE liabilities | 107,232,201 | — | 102,339,081 | 4,893,120 | ||||||||||||||||||
Total | $ | 107,237,677 | $ | — | $ | 102,344,557 | $ | 4,893,120 | ||||||||||||||
Schedule of changes in financial assets and liabilities classified as Level III | The changes in financial assets and liabilities classified as Level III were as follows for the three months ended March 31, 2015 and 2014 (amounts in thousands): | |||||||||||||||||||||
Domestic | ||||||||||||||||||||||
Loans | Servicing | VIE | ||||||||||||||||||||
Three Months Ended March 31, 2015 | Held‑for‑sale | RMBS | CMBS | Rights | VIE Assets | Liabilities | Total | |||||||||||||||
January 1, 2015 balance | $ | 391,620 | $ | 207,053 | $ | 334,080 | $ | 132,303 | $ | 107,816,065 | $ | -4,893,120 | $ | 103,988,001 | ||||||||
Total realized and unrealized (losses) gains: | ||||||||||||||||||||||
Included in earnings: | ||||||||||||||||||||||
Change in fair value / gain on sale | 21,131 | — | -160 | -1,542 | -8,847,854 | 2,460,672 | -6,367,753 | |||||||||||||||
OTTI | — | — | — | — | — | — | — | |||||||||||||||
Net accretion | — | 9,445 | — | — | — | — | 9,445 | |||||||||||||||
Included in OCI | — | -7,626 | -5,216 | — | — | — | -12,842 | |||||||||||||||
Purchases / Originations | 413,221 | — | 8,738 | — | — | — | 421,959 | |||||||||||||||
Sales | -482,009 | — | -4,713 | — | — | — | -486,722 | |||||||||||||||
Issuances | — | — | — | — | — | -6,763 | -6,763 | |||||||||||||||
Cash repayments / receipts | -193 | -11,487 | -225 | — | — | 47,936 | 36,031 | |||||||||||||||
Transfers into Level III | — | — | — | — | — | -192,481 | -192,481 | |||||||||||||||
Transfers out of Level III | — | — | — | — | — | 549,370 | 549,370 | |||||||||||||||
Consolidations of VIEs | — | — | -24,309 | — | 4,413,608 | -111,072 | 4,278,227 | |||||||||||||||
Deconsolidations of VIEs | — | — | — | — | -17,841 | — | -17,841 | |||||||||||||||
March 31, 2015 balance | $ | 343,770 | $ | 197,385 | $ | 308,195 | $ | 130,761 | $ | 103,363,978 | $ | -2,145,458 | $ | 102,198,631 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at March 31, 2015 | $ | 4,788 | $ | 3,952 | $ | -1,101 | $ | -1,542 | $ | -8,847,854 | $ | 2,460,672 | $ | -6,381,085 | ||||||||
Domestic | ||||||||||||||||||||||
Loans | Servicing | VIE | ||||||||||||||||||||
Three Months Ended March 31, 2014 | Held‑for‑sale | RMBS | CMBS | Rights | VIE Assets | Liabilities | Total | |||||||||||||||
January 1, 2014 balance | $ | 206,672 | $ | 296,236 | $ | 208,006 | $ | 150,149 | $ | 103,151,624 | $ | -1,597,984 | $ | 102,414,703 | ||||||||
Total realized and unrealized gains: | ||||||||||||||||||||||
Included in earnings: | ||||||||||||||||||||||
Change in fair value / gain on sale | 20,893 | 1,011 | 5,207 | -5,251 | -3,681,541 | 101,499 | -3,558,182 | |||||||||||||||
OTTI | — | -213 | — | — | — | — | -213 | |||||||||||||||
Net accretion | — | 6,564 | — | — | — | — | 6,564 | |||||||||||||||
Included in OCI | — | 4,748 | -533 | — | — | — | 4,215 | |||||||||||||||
Purchases / Originations | 261,825 | — | 3,831 | — | — | — | 265,656 | |||||||||||||||
Sales | -302,461 | -9,310 | -15,844 | — | — | — | -327,615 | |||||||||||||||
Issuances | — | — | — | — | — | -45,761 | -45,761 | |||||||||||||||
Cash repayments / receipts | -92 | -7,819 | -408 | — | — | 35,366 | 27,047 | |||||||||||||||
Transfers into Level III | — | — | 47,300 | — | — | -571,612 | -524,312 | |||||||||||||||
Transfers out of Level III | -112,720 | — | -179 | — | — | 419,741 | 306,842 | |||||||||||||||
Consolidations of VIEs | — | — | -6,715 | — | 20,270,649 | -1,824,171 | 18,439,763 | |||||||||||||||
Deconsolidations of VIEs | — | — | — | — | -1,289,214 | — | -1,289,214 | |||||||||||||||
March 31, 2014 balance | $ | 74,117 | $ | 291,217 | $ | 240,665 | $ | 144,898 | $ | 118,451,518 | $ | -3,482,922 | $ | 115,719,493 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at March 31, 2014 | $ | 177 | $ | 6,295 | $ | 5,207 | $ | -5,251 | $ | -3,681,541 | $ | 101,499 | $ | -3,573,614 | ||||||||
Schedule of fair value of financial instruments not carried at fair value | The following table presents the fair values (all Level III) of our financial instruments not carried at fair value on the consolidated balance sheets (amounts in thousands): | |||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||||||||
Value | Value | Value | Value | |||||||||||||||||||
Financial assets not carried at fair value: | ||||||||||||||||||||||
Loans held-for-investment and loans transferred as secured borrowings | $ | 6,135,825 | $ | 6,258,516 | $ | 5,908,665 | 6,034,838 | |||||||||||||||
Securities, held-to-maturity | 501,686 | 499,255 | 441,995 | 440,629 | ||||||||||||||||||
European servicing rights | 8,041 | 11,205 | 11,849 | 12,741 | ||||||||||||||||||
Financial liabilities not carried at fair value: | ||||||||||||||||||||||
Secured financing agreements and secured borrowings on transferred loans | $ | 3,806,834 | $ | 3,799,857 | $ | 3,267,230 | 3,251,035 | |||||||||||||||
Convertible senior notes | 1,324,125 | 1,354,314 | 1,418,022 | 1,444,975 | ||||||||||||||||||
Schedule of quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | The following is quantitative information about significant unobservable inputs in our Level III measurements for those assets and liabilities measured at fair value on a recurring basis (dollar amounts in thousands): | |||||||||||||||||||||
Carrying Value at | Valuation | Unobservable | Range as of (1) | |||||||||||||||||||
31-Mar-15 | Technique | Input | 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||
Loans held-for-sale, fair value option | $ | 343,770 | Discounted cash flow | Yield (b) | 4.0% - 4.5% | 4.2% - 4.9% | ||||||||||||||||
Duration (c) | 5.0 - 11.0 years | 5.0 - 10.0 years | ||||||||||||||||||||
RMBS | 197,385 | Discounted cash flow | Constant prepayment rate (a) | 3.3% - 15.3% | 1.2% - 15.9% | |||||||||||||||||
Constant default rate (b) | 1.1% - 9.0% | 1.1% - 8.9% | ||||||||||||||||||||
Loss severity (b) | 15% - 81% (e) | 15% - 80% (e) | ||||||||||||||||||||
Delinquency rate (c) | 2% - 31% | 2% - 43% | ||||||||||||||||||||
Servicer advances (a) | 31% - 88% | 14% - 75% | ||||||||||||||||||||
Annual coupon deterioration (b) | 0% - 0.5% | 0% - 0.6% | ||||||||||||||||||||
Putback amount per projected total collateral loss (d) | 0% - 16% | 0% - 11% | ||||||||||||||||||||
CMBS | 308,195 | Discounted cash flow | Yield (b) | 0% - 240.8% | 0% - 421.4% | |||||||||||||||||
Duration (c) | 0 - 13.7 years | 0 - 11.8 years | ||||||||||||||||||||
Domestic servicing rights | 130,761 | Discounted cash flow | Debt yield (a) | 8.25% | 8.25% | |||||||||||||||||
Discount rate (b) | 15% | 15% | ||||||||||||||||||||
Control migration (b) | 0% - 80% | 0% - 80% | ||||||||||||||||||||
VIE assets | 103,363,978 | Discounted cash flow | Yield (b) | 0% - 910.1% | 0% - 925.0% | |||||||||||||||||
Duration (c) | 0 - 20.1 years | 0 - 21.0 years | ||||||||||||||||||||
VIE liabilities | 2,145,458 | Discounted cash flow | Yield (b) | 0% - 910.1% | 0% - 925.0% | |||||||||||||||||
Duration (c) | 0 - 20.1 years | 0 - 21.0 years | ||||||||||||||||||||
-1 | The ranges of significant unobservable inputs are represented in percentages and years. | |||||||||||||||||||||
Sensitivity of the Fair Value to Changes in the Unobservable Inputs | ||||||||||||||||||||||
(a) | Significant increase (decrease) in the unobservable input in isolation would result in a significantly higher (lower) fair value measurement. | |||||||||||||||||||||
(b) | Significant increase (decrease) in the unobservable input in isolation would result in a significantly lower (higher) fair value measurement. | |||||||||||||||||||||
(c) | Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question. | |||||||||||||||||||||
(d) | Any delay in the putback recovery date leads to a decrease in fair value, for the majority of securities in our RMBS portfolio. | |||||||||||||||||||||
(e) | 82% and 85% of the portfolio falls within a range of 45%-80% as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Income Taxes | |||||||||||||
Schedule of income tax provision | Our income tax provision consisted of the following for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||
For the Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Current | |||||||||||||
Federal | $ | 11,506 | $ | 5,140 | |||||||||
Foreign | 1,036 | 1,449 | |||||||||||
State | 1,955 | 870 | |||||||||||
Total current | 14,497 | 7,459 | |||||||||||
Deferred | |||||||||||||
Federal | 1,959 | -704 | |||||||||||
Foreign | -789 | -1,006 | |||||||||||
State | 284 | -129 | |||||||||||
Total deferred | 1,454 | -1,839 | |||||||||||
Total income tax provision | $ | 15,951 | $ | 5,620 | |||||||||
Schedule of tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities | The following table presents each of these tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities (in thousands): | ||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||
U.S. | |||||||||||||
Deferred tax asset, net | |||||||||||||
Reserves and accruals | $ | 11,563 | $ | 13,818 | |||||||||
Domestic intangible assets | 8,963 | 9,617 | |||||||||||
Investment securities and loans | -2,394 | -2,327 | |||||||||||
Investment in unconsolidated entities | 1,436 | 883 | |||||||||||
Deferred income | 433 | 427 | |||||||||||
Net operating and capital loss carryforwards | 3,753 | 2,498 | |||||||||||
Valuation allowance | -3,753 | -2,498 | |||||||||||
Other U.S. temporary differences | 689 | 515 | |||||||||||
20,690 | 22,933 | ||||||||||||
Europe | |||||||||||||
Deferred tax liability, net | |||||||||||||
European servicing rights | -1,801 | -2,681 | |||||||||||
Net operating and capital loss carryforwards | 7,867 | 8,702 | |||||||||||
Valuation allowance | -7,867 | -8,702 | |||||||||||
Other European temporary differences | -262 | -337 | |||||||||||
-2,063 | -3,018 | ||||||||||||
Net deferred tax assets (liabilities) | $ | 18,627 | $ | 19,915 | |||||||||
Schedule of reconciliation of federal income tax determined using statutory federal tax rate to reported income tax provision | The following table is a reconciliation of our federal income tax determined using our statutory federal tax rate to our reported income tax provision for the three months ended March 31, 2015 and 2014 (dollar amounts in thousands): | ||||||||||||
For the Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Federal statutory tax rate | $ | 47,856 | 35.0 | % | $ | 44,275 | 35.0 | % | |||||
REIT and other non-taxable income | -34,972 | -25.6 | % | -40,382 | -32 | % | |||||||
State income taxes | 2,001 | 1.5 | % | 450 | 0.4 | % | |||||||
Federal benefit of state tax deduction | -700 | -0.5 | % | -158 | -0.1 | % | |||||||
Valuation allowance | 1,255 | 0.9 | % | 1,512 | 1.2 | % | |||||||
Other | 511 | 0.4 | % | -77 | -0.1 | % | |||||||
Effective tax rate | $ | 15,951 | 11.7 | % | $ | 5,620 | 4.4 | % | |||||
Segment_Data_Tables
Segment Data (Tables) | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Segment Data | ||||||||||||||||||||||
Schedule of results of operations by business segment | The table below presents our results of operations for the three months ended March 31, 2015 by business segment (amounts in thousands): | |||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | and Servicing | ||||||||||||||||||||
Segment | Segment | Corporate | Subtotal | VIEs | Total | |||||||||||||||||
Revenues: | ||||||||||||||||||||||
Interest income from loans | $ | 113,472 | $ | 4,957 | $ | — | $ | 118,429 | $ | — | $ | 118,429 | ||||||||||
Interest income from investment securities | 22,296 | 24,696 | — | 46,992 | -19,248 | 27,744 | ||||||||||||||||
Servicing fees | 84 | 50,948 | — | 51,032 | -22,775 | 28,257 | ||||||||||||||||
Other revenues | 79 | 4,602 | — | 4,681 | -262 | 4,419 | ||||||||||||||||
Total revenues | 135,931 | 85,203 | — | 221,134 | -42,285 | 178,849 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Management fees | 388 | 18 | 27,512 | 27,918 | 50 | 27,968 | ||||||||||||||||
Interest expense | 21,523 | 2,119 | 26,892 | 50,534 | — | 50,534 | ||||||||||||||||
General and administrative | 4,860 | 29,189 | 1,029 | 35,078 | 186 | 35,264 | ||||||||||||||||
Acquisition and investment pursuit costs | 773 | 213 | 200 | 1,186 | — | 1,186 | ||||||||||||||||
Depreciation and amortization | — | 4,085 | — | 4,085 | — | 4,085 | ||||||||||||||||
Loan loss allowance, net | 317 | — | — | 317 | — | 317 | ||||||||||||||||
Other expense | — | 2,073 | — | 2,073 | — | 2,073 | ||||||||||||||||
Total costs and expenses | 27,861 | 37,697 | 55,633 | 121,191 | 236 | 121,427 | ||||||||||||||||
Income before other income, income taxes and non-controlling interests | 108,070 | 47,506 | -55,633 | 99,943 | -42,521 | 57,422 | ||||||||||||||||
Other income: | ||||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 47,861 | 47,861 | ||||||||||||||||
Change in fair value of servicing rights | — | -4,875 | — | -4,875 | 3,333 | -1,542 | ||||||||||||||||
Change in fair value of investment securities, net | -339 | 8,313 | — | 7,974 | -8,473 | -499 | ||||||||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | 21,131 | — | 21,131 | — | 21,131 | ||||||||||||||||
Earnings from unconsolidated entities | 3,496 | 2,724 | — | 6,220 | -130 | 6,090 | ||||||||||||||||
Gain on sale of investments and other assets, net | 98 | 17,100 | — | 17,198 | — | 17,198 | ||||||||||||||||
Gain (loss) on derivative financial instruments, net | 32,630 | -8,007 | — | 24,623 | — | 24,623 | ||||||||||||||||
Foreign currency (loss), net | -29,136 | -1,171 | — | -30,307 | — | -30,307 | ||||||||||||||||
Loss on extinguishment of debt | — | — | -5,292 | -5,292 | — | -5,292 | ||||||||||||||||
Other income, net | — | 31 | 14 | 45 | — | 45 | ||||||||||||||||
Total other income (loss) | 6,749 | 35,246 | -5,278 | 36,717 | 42,591 | 79,308 | ||||||||||||||||
Income (loss) before income taxes | 114,819 | 82,752 | -60,911 | 136,660 | 70 | 136,730 | ||||||||||||||||
Income tax benefit (provision) | 30 | -15,981 | — | -15,951 | — | -15,951 | ||||||||||||||||
Net income (loss) | 114,849 | 66,771 | -60,911 | 120,709 | 70 | 120,779 | ||||||||||||||||
Net income attributable to non-controlling interests | -346 | — | — | -346 | -70 | -416 | ||||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 114,503 | $ | 66,771 | $ | -60,911 | $ | 120,363 | $ | — | $ | 120,363 | ||||||||||
The table below presents our results of operations for the three months ended March 31, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | Single Family | and Servicing | |||||||||||||||||||
Segment | Segment | Corporate | Residential | Subtotal | VIEs | Total | ||||||||||||||||
Revenues: | ||||||||||||||||||||||
Interest income from loans | $ | 102,087 | $ | 2,823 | $ | — | $ | — | $ | 104,910 | $ | — | $ | 104,910 | ||||||||
Interest income from investment securities | 18,289 | 23,008 | — | — | 41,297 | -11,843 | 29,454 | |||||||||||||||
Servicing fees | 37 | 56,185 | — | — | 56,222 | -22,011 | 34,211 | |||||||||||||||
Other revenues | 80 | 3,597 | — | — | 3,677 | -273 | 3,404 | |||||||||||||||
Total revenues | 120,493 | 85,613 | — | — | 206,106 | -34,127 | 171,979 | |||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Management fees | 627 | 18 | 27,138 | — | 27,783 | 38 | 27,821 | |||||||||||||||
Interest expense | 15,826 | 951 | 21,054 | — | 37,831 | — | 37,831 | |||||||||||||||
General and administrative | 5,145 | 39,349 | 1,421 | — | 45,915 | 186 | 46,101 | |||||||||||||||
Acquisition and investment pursuit costs | 212 | 182 | — | — | 394 | — | 394 | |||||||||||||||
Depreciation and amortization | — | 4,636 | — | — | 4,636 | — | 4,636 | |||||||||||||||
Loan loss allowance, net | 497 | — | — | — | 497 | — | 497 | |||||||||||||||
Other expense | -14 | 1,703 | — | — | 1,689 | — | 1,689 | |||||||||||||||
Total costs and expenses | 22,293 | 46,839 | 49,613 | — | 118,745 | 224 | 118,969 | |||||||||||||||
Income before other income, income taxes and non-controlling interests | 98,200 | 38,774 | -49,613 | — | 87,361 | -34,351 | 53,010 | |||||||||||||||
Other income: | ||||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | — | 56,004 | 56,004 | |||||||||||||||
Change in fair value of servicing rights | — | -12,175 | — | — | -12,175 | 6,924 | -5,251 | |||||||||||||||
Change in fair value of investment securities, net | -156 | 36,952 | — | — | 36,796 | -28,435 | 8,361 | |||||||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | 20,893 | — | — | 20,893 | — | 20,893 | |||||||||||||||
Earnings (loss) from unconsolidated entities | 1,540 | -1,383 | — | — | 157 | -93 | 64 | |||||||||||||||
Gain on sale of investments, net | 1,555 | — | — | — | 1,555 | — | 1,555 | |||||||||||||||
Loss on derivative financial instruments, net | -2,788 | -5,078 | — | — | -7,866 | — | -7,866 | |||||||||||||||
Foreign currency gain (loss), net | 1,561 | -84 | — | — | 1,477 | — | 1,477 | |||||||||||||||
OTTI | -213 | — | — | — | -213 | — | -213 | |||||||||||||||
Other income, net | 18 | — | — | — | 18 | — | 18 | |||||||||||||||
Total other income | 1,517 | 39,125 | — | — | 40,642 | 34,400 | 75,042 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 99,717 | 77,899 | -49,613 | — | 128,003 | 49 | 128,052 | |||||||||||||||
Income tax provision | -83 | -5,537 | — | — | -5,620 | — | -5,620 | |||||||||||||||
Income (loss) from continuing operations | 99,634 | 72,362 | -49,613 | — | 122,383 | 49 | 122,432 | |||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | -1,551 | -1,551 | — | -1,551 | |||||||||||||||
Net income (loss) | 99,634 | 72,362 | -49,613 | -1,551 | 120,832 | 49 | 120,881 | |||||||||||||||
Net income attributable to non-controlling interests | -231 | — | — | — | -231 | -49 | -280 | |||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 99,403 | $ | 72,362 | $ | -49,613 | $ | -1,551 | $ | 120,601 | $ | — | $ | 120,601 | ||||||||
Schedule of condensed consolidated balance sheet by business segment | The table below presents our condensed consolidated balance sheet as of March 31, 2015 by business segment (amounts in thousands): | |||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | and Servicing | ||||||||||||||||||||
Segment | Segment | Corporate | Subtotal | VIEs | Total | |||||||||||||||||
Assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 94,136 | $ | 142,976 | $ | 122,953 | $ | 360,065 | $ | 655 | $ | 360,720 | ||||||||||
Restricted cash | 20,232 | 19,336 | — | 39,568 | — | 39,568 | ||||||||||||||||
Loans held-for-investment, net | 6,037,731 | 3,094 | — | 6,040,825 | — | 6,040,825 | ||||||||||||||||
Loans held-for-sale, at fair value | — | 343,770 | — | 343,770 | — | 343,770 | ||||||||||||||||
Loans transferred as secured borrowings | 95,000 | — | — | 95,000 | — | 95,000 | ||||||||||||||||
Investment securities | 808,025 | 806,876 | — | 1,614,901 | -593,590 | 1,021,311 | ||||||||||||||||
Intangible assets—servicing rights | — | 181,524 | — | 181,524 | -42,722 | 138,802 | ||||||||||||||||
Investment in unconsolidated entities | 165,830 | 50,855 | — | 216,685 | -6,852 | 209,833 | ||||||||||||||||
Goodwill | — | 140,437 | — | 140,437 | — | 140,437 | ||||||||||||||||
Derivative assets | 54,812 | 3,789 | — | 58,601 | — | 58,601 | ||||||||||||||||
Accrued interest receivable | 38,050 | 1,071 | — | 39,121 | — | 39,121 | ||||||||||||||||
Other assets | 38,081 | 78,512 | 13,866 | 130,459 | -1,611 | 128,848 | ||||||||||||||||
VIE assets, at fair value | — | — | — | — | 103,363,978 | 103,363,978 | ||||||||||||||||
Total Assets | $ | 7,351,897 | $ | 1,772,240 | $ | 136,819 | $ | 9,260,956 | $ | 102,719,858 | $ | 111,980,814 | ||||||||||
Liabilities and Equity | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 19,210 | $ | 77,386 | $ | 15,863 | $ | 112,459 | $ | 495 | $ | 112,954 | ||||||||||
Related-party payable | — | 3,562 | 24,111 | 27,673 | — | 27,673 | ||||||||||||||||
Dividends payable | — | — | 108,435 | 108,435 | — | 108,435 | ||||||||||||||||
Derivative liabilities | 7,128 | 4,817 | — | 11,945 | — | 11,945 | ||||||||||||||||
Secured financing agreements, net | 2,665,075 | 385,417 | 661,342 | 3,711,834 | — | 3,711,834 | ||||||||||||||||
Convertible senior notes, net | — | — | 1,324,125 | 1,324,125 | — | 1,324,125 | ||||||||||||||||
Secured borrowings on transferred loans | 95,000 | — | — | 95,000 | — | 95,000 | ||||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 102,708,732 | 102,708,732 | ||||||||||||||||
Total Liabilities | 2,786,413 | 471,182 | 2,133,876 | 5,391,471 | 102,709,227 | 108,100,698 | ||||||||||||||||
Equity: | ||||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||||
Common stock | — | — | 2,255 | 2,255 | — | 2,255 | ||||||||||||||||
Additional paid-in capital | 3,042,637 | 1,263,796 | -469,393 | 3,837,040 | — | 3,837,040 | ||||||||||||||||
Treasury stock | — | — | -23,635 | -23,635 | — | -23,635 | ||||||||||||||||
Accumulated other comprehensive income | 42,676 | -3,314 | — | 39,362 | — | 39,362 | ||||||||||||||||
Retained earnings (accumulated deficit) | 1,468,258 | 40,576 | -1,506,284 | 2,550 | — | 2,550 | ||||||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 4,553,571 | 1,301,058 | -1,997,057 | 3,857,572 | — | 3,857,572 | ||||||||||||||||
Non-controlling interests in consolidated subsidiaries | 11,913 | — | — | 11,913 | 10,631 | 22,544 | ||||||||||||||||
Total Equity | 4,565,484 | 1,301,058 | -1,997,057 | 3,869,485 | 10,631 | 3,880,116 | ||||||||||||||||
Total Liabilities and Equity | $ | 7,351,897 | $ | 1,772,240 | $ | 136,819 | $ | 9,260,956 | $ | 102,719,858 | $ | 111,980,814 | ||||||||||
The table below presents our condensed consolidated balance sheet as of December 31, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||||
Investing | Investing | |||||||||||||||||||||
Lending | and Servicing | and Servicing | ||||||||||||||||||||
Segment | Segment | Corporate | Subtotal | VIEs | Total | |||||||||||||||||
Assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 125,132 | $ | 85,252 | $ | 44,017 | $ | 254,401 | $ | 786 | $ | 255,187 | ||||||||||
Restricted cash | 34,941 | 13,763 | — | 48,704 | — | 48,704 | ||||||||||||||||
Loans held-for-investment, net | 5,771,307 | 7,931 | — | 5,779,238 | — | 5,779,238 | ||||||||||||||||
Loans held-for-sale, at fair value | — | 391,620 | — | 391,620 | — | 391,620 | ||||||||||||||||
Loans transferred as secured borrowings | 129,427 | — | — | 129,427 | — | 129,427 | ||||||||||||||||
Investment securities | 764,517 | 753,553 | — | 1,518,070 | -519,822 | 998,248 | ||||||||||||||||
Intangible assets-servicing rights | — | 190,207 | — | 190,207 | -46,055 | 144,152 | ||||||||||||||||
Investment in unconsolidated entities | 152,012 | 48,693 | — | 200,705 | -6,722 | 193,983 | ||||||||||||||||
Goodwill | — | 140,437 | — | 140,437 | — | 140,437 | ||||||||||||||||
Derivative assets | 23,579 | 3,049 | — | 26,628 | — | 26,628 | ||||||||||||||||
Accrued interest receivable | 39,188 | 914 | — | 40,102 | — | 40,102 | ||||||||||||||||
Other assets | 21,329 | 100,902 | 14,739 | 136,970 | -1,464 | 135,506 | ||||||||||||||||
VIE assets, at fair value | — | — | — | — | 107,816,065 | 107,816,065 | ||||||||||||||||
Total Assets | $ | 7,061,432 | $ | 1,736,321 | $ | 58,756 | $ | 8,856,509 | $ | 107,242,788 | $ | 116,099,297 | ||||||||||
Liabilities and Equity | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 23,014 | $ | 97,424 | $ | 23,621 | $ | 144,059 | $ | 457 | $ | 144,516 | ||||||||||
Related-party payable | — | 4,405 | 36,346 | 40,751 | — | 40,751 | ||||||||||||||||
Dividends payable | 1 | — | 108,188 | 108,189 | — | 108,189 | ||||||||||||||||
Derivative liabilities | 3,662 | 1,814 | — | 5,476 | — | 5,476 | ||||||||||||||||
Secured financing agreements, net | 2,252,493 | 222,363 | 662,933 | 3,137,789 | — | 3,137,789 | ||||||||||||||||
Convertible senior notes, net | — | — | 1,418,022 | 1,418,022 | — | 1,418,022 | ||||||||||||||||
Secured borrowings on transferred loans | 129,441 | — | — | 129,441 | — | 129,441 | ||||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 107,232,201 | 107,232,201 | ||||||||||||||||
Total Liabilities | 2,408,611 | 326,006 | 2,249,110 | 4,983,727 | 107,232,658 | 112,216,385 | ||||||||||||||||
Equity: | ||||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||||
Common stock | — | — | 2,248 | 2,248 | — | 2,248 | ||||||||||||||||
Additional paid-in capital | 3,254,144 | 1,413,608 | -832,027 | 3,835,725 | — | 3,835,725 | ||||||||||||||||
Treasury stock | — | — | -23,635 | -23,635 | — | -23,635 | ||||||||||||||||
Accumulated other comprehensive income | 55,781 | 115 | — | 55,896 | — | 55,896 | ||||||||||||||||
Accumulated deficit | 1,330,970 | -3,408 | -1,336,940 | -9,378 | — | -9,378 | ||||||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 4,640,895 | 1,410,315 | -2,190,354 | 3,860,856 | — | 3,860,856 | ||||||||||||||||
Non-controlling interests in consolidated subsidiaries | 11,926 | — | — | 11,926 | 10,130 | 22,056 | ||||||||||||||||
Total Equity | 4,652,821 | 1,410,315 | -2,190,354 | 3,872,782 | 10,130 | 3,882,912 | ||||||||||||||||
Total Liabilities and Equity | $ | 7,061,432 | $ | 1,736,321 | $ | 58,756 | $ | 8,856,509 | $ | 107,242,788 | $ | 116,099,297 | ||||||||||
Business_and_Organization_Deta
Business and Organization (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||
Share data in Millions, unless otherwise specified | Mar. 31, 2015 | Feb. 21, 2014 | Jan. 31, 2014 | Jan. 24, 2014 | Jan. 31, 2014 |
item | |||||
Business and Organization | |||||
Number of reportable business segments | 2 | ||||
Minimum annual REIT taxable income distributable to stockholders (as a percent) | 90.00% | ||||
SWAY | |||||
Spin-off transaction | |||||
Net assets | $1,100,000,000 | 1,100,000,000 | |||
Number of units of single-family homes | 7,200 | 7,200 | |||
Shares issued | 40.1 | ||||
Spin off | Single Family Residential | |||||
Spin-off transaction | |||||
Share exchange ratio | 0.2 | 0.2 | |||
Cash contribution | $100,000,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Fair Value Measurements | |
Permitted reinvestment under static investment in VIEs | $0 |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Summarized consolidated results of discontinued operations for the SFR segment prior to the spin-off | |
Net loss | ($1,551) |
Single Family Residential | |
Summarized consolidated results of discontinued operations for the SFR segment prior to the spin-off | |
Total revenues | 3,876 |
Total costs and expenses | 6,369 |
Loss before other income and income taxes | -2,493 |
Total other income | 942 |
Loss before income taxes | -1,551 |
Net loss | ($1,551) |
Acquisitions_and_Divestitures_2
Acquisitions and Divestitures (Details 2) (Ireland Portfolio, Expected, EUR €) | 1 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
property | |
sqft | |
Acquisition | |
Number of properties in portfolio investment | 13 |
Area of property | 630,000 |
Initial aggregate purchase price to be transferred | € 452.50 |
Office Properties | |
Acquisition | |
Number of properties in portfolio investment | 9 |
Number of additional properties | 3 |
Loans_Details
Loans (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Investments in loans | ||||
Total gross loans | $6,485,943,000 | $6,306,316,000 | ||
Loan loss allowance (loans held-for-investment) | -6,348,000 | -6,031,000 | -4,481,000 | -3,984,000 |
Carrying Value | 6,479,595,000 | 6,300,285,000 | ||
Face Amount | 6,569,028,000 | 6,394,245,000 | ||
Loans with variable rates of interest | 4,859,540,000 | 4,468,210,000 | ||
Loans with variable rates of interest (as a percent) | 80.40% | |||
Variable rate basis of loans | LIBOR | |||
Weighted average spread of loans (as a percent) | 5.90% | |||
Amount of loan impairment charges on individual loans held-for-investment | 0 | 0 | ||
1-month LIBOR | ||||
Investments in loans | ||||
Loans with variable rates of interest | 337,566,000 | 138,576,000 | ||
Effective variable rate basis (as a percent) | 0.18% | 0.17% | ||
3 Month LIBOR | ||||
Investments in loans | ||||
Loans with variable rates of interest | 401,221,000 | 440,222,000 | ||
Effective variable rate basis (as a percent) | 0.57% | 0.56% | ||
LIBOR floor | ||||
Investments in loans | ||||
Loans with variable rates of interest | 4,120,753,000 | 3,889,412,000 | ||
LIBOR floor | Minimum | ||||
Investments in loans | ||||
Effective variable rate basis (as a percent) | 0.15% | 0.15% | ||
LIBOR floor | Maximum | ||||
Investments in loans | ||||
Effective variable rate basis (as a percent) | 3.00% | 3.00% | ||
LIBOR floor | Weighted-average | ||||
Investments in loans | ||||
Effective variable rate basis (as a percent) | 0.32% | 0.35% | ||
Total loans held-for-investment | ||||
Investments in loans | ||||
Total gross loans | 6,047,173,000 | 5,785,269,000 | ||
Face Amount | 6,135,233,000 | 5,874,333,000 | ||
Carrying amount of loans in default | 3,100,000 | |||
Loans held-for-sale, fair value option | ||||
Investments in loans | ||||
Total gross loans | 343,770,000 | 391,620,000 | ||
Face Amount | 338,795,000 | 390,342,000 | ||
Weighted Average Coupon (as a percent) | 4.40% | 4.50% | ||
Weighted Average Life | 9 years 3 months 18 days | 8 years 3 months 18 days | ||
Loans transferred as secured borrowings | ||||
Investments in loans | ||||
Total gross loans | 95,000,000 | 129,427,000 | ||
Face Amount | 95,000,000 | 129,570,000 | ||
Weighted Average Coupon (as a percent) | 6.00% | 5.40% | ||
Weighted Average Life | 2 years 3 months 18 days | 2 years 6 months | ||
First Mortgages: | Total loans held-for-investment | ||||
Investments in loans | ||||
Total gross loans | 4,008,607,000 | 3,834,700,000 | ||
Face Amount | 4,073,852,000 | 3,898,021,000 | ||
Weighted Average Coupon (as a percent) | 5.20% | 5.40% | ||
Weighted Average Life | 3 years 7 months 6 days | 3 years 7 months 6 days | ||
Subordinated mortgages | Total loans held-for-investment | ||||
Investments in loans | ||||
Total gross loans | 325,172,000 | 345,091,000 | ||
Face Amount | 353,614,000 | 374,859,000 | ||
Weighted Average Coupon (as a percent) | 7.90% | 8.10% | ||
Weighted Average Life | 3 years 9 months 18 days | 3 years 10 months 24 days | ||
Mezzanine Loans | Total loans held-for-investment | ||||
Investments in loans | ||||
Total gross loans | 1,713,394,000 | 1,605,478,000 | ||
Face Amount | $1,707,767,000 | $1,601,453,000 | ||
Weighted Average Coupon (as a percent) | 10.20% | 10.30% | ||
Weighted Average Life | 3 years 3 months 18 days | 3 years |
Loans_Details_2
Loans (Details 2) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Investments in loans | ||
Total gross loans | $6,485,943,000 | $6,306,316,000 |
Total gross loans (as a percent) | 100.00% | 100.00% |
Amount of loan impairment charges on individual loans held-for-investment | 0 | 0 |
Rating 1 | ||
Investments in loans | ||
Total gross loans | 822,000 | |
Rating 1 | Maximum | ||
Investments in loans | ||
LTV (as a percent) | 65.00% | |
Rating 2 | ||
Investments in loans | ||
Total gross loans | 604,767,000 | 523,572,000 |
Total gross loans (as a percent) | 9.30% | 8.30% |
Rating 2 | Maximum | ||
Investments in loans | ||
LTV (as a percent) | 70.00% | |
Rating 3 | ||
Investments in loans | ||
Total gross loans | 5,218,431,000 | 5,092,243,000 |
Total gross loans (as a percent) | 80.50% | 80.70% |
Rating 3 | Maximum | ||
Investments in loans | ||
LTV (as a percent) | 80.00% | |
Rating 4 | ||
Investments in loans | ||
Total gross loans | 269,898,000 | 248,793,000 |
Total gross loans (as a percent) | 4.20% | 4.00% |
Allowance for loan losses as a percent of carrying amount | 1.50% | |
Rating 4 | Minimum | ||
Investments in loans | ||
LTV (as a percent) | 80.00% | |
Rating 4 | Maximum | ||
Investments in loans | ||
LTV (as a percent) | 90.00% | |
Rating 5 | ||
Investments in loans | ||
Total gross loans | 45,983,000 | 45,974,000 |
Total gross loans (as a percent) | 0.70% | 0.70% |
Allowance for loan losses as a percent of carrying amount | 5.00% | |
Rating 5 | Minimum | ||
Investments in loans | ||
LTV (as a percent) | 90.00% | |
N/A | ||
Investments in loans | ||
Total gross loans | 346,864,000 | 394,912,000 |
Total gross loans (as a percent) | 5.30% | 6.30% |
Total loans held-for-investment | ||
Investments in loans | ||
Total gross loans | 6,047,173,000 | 5,785,269,000 |
Carrying amount of loans in default | 3,100,000 | |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | ||
Investments in loans | ||
Total gross loans | 4,005,513,000 | 3,831,408,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 1 | ||
Investments in loans | ||
Total gross loans | 822,000 | |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 2 | ||
Investments in loans | ||
Total gross loans | 287,280,000 | 115,407,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 3 | ||
Investments in loans | ||
Total gross loans | 3,562,495,000 | 3,559,716,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 4 | ||
Investments in loans | ||
Total gross loans | 109,755,000 | 109,489,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 5 | ||
Investments in loans | ||
Total gross loans | 45,983,000 | 45,974,000 |
Total loans held-for-investment | Subordinated mortgages | ||
Investments in loans | ||
Total gross loans | 325,172,000 | 345,091,000 |
Total loans held-for-investment | Subordinated mortgages | Rating 2 | ||
Investments in loans | ||
Total gross loans | 109,085,000 | 116,168,000 |
Total loans held-for-investment | Subordinated mortgages | Rating 3 | ||
Investments in loans | ||
Total gross loans | 183,457,000 | 196,476,000 |
Total loans held-for-investment | Subordinated mortgages | Rating 4 | ||
Investments in loans | ||
Total gross loans | 32,630,000 | 32,447,000 |
Total loans held-for-investment | Mezzanine Loans | ||
Investments in loans | ||
Total gross loans | 1,713,394,000 | 1,605,478,000 |
Total loans held-for-investment | Mezzanine Loans | Rating 2 | ||
Investments in loans | ||
Total gross loans | 208,402,000 | 291,997,000 |
Total loans held-for-investment | Mezzanine Loans | Rating 3 | ||
Investments in loans | ||
Total gross loans | 1,377,479,000 | 1,206,624,000 |
Total loans held-for-investment | Mezzanine Loans | Rating 4 | ||
Investments in loans | ||
Total gross loans | 127,513,000 | 106,857,000 |
Total loans held-for-investment | Cost Recovery Loans | ||
Investments in loans | ||
Total gross loans | 3,094,000 | 3,292,000 |
Total loans held-for-investment | Cost Recovery Loans | N/A | ||
Investments in loans | ||
Total gross loans | 3,094,000 | 3,292,000 |
Loans held-for-sale, fair value option | ||
Investments in loans | ||
Total gross loans | 343,770,000 | 391,620,000 |
Loans held-for-sale, fair value option | N/A | ||
Investments in loans | ||
Total gross loans | 343,770,000 | 391,620,000 |
Loans transferred as secured borrowings | ||
Investments in loans | ||
Total gross loans | 95,000,000 | 129,427,000 |
Loans transferred as secured borrowings | Rating 3 | ||
Investments in loans | ||
Total gross loans | $95,000,000 | $129,427,000 |
Loans_Details_3
Loans (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Activity in allowance for loan losses | ||
Allowance for loan losses at the beginning of the period | $6,031 | $3,984 |
Provision for loan losses | 317 | 497 |
Allowance for loan losses at the end of the period | 6,348 | 4,481 |
Recorded investment in loans related to the allowance for loan loss | 315,881 | 298,753 |
Activity in loan portfolio | ||
Balance at the beginning of the period | 6,300,285 | 4,750,804 |
Acquisitions/origination/additional funding | 1,063,108 | 981,762 |
Capitalized Interest | 17,490 | 8,656 |
Basis of loans sold | -567,033 | -448,317 |
Loan maturities/principal repayments | -320,379 | -353,934 |
Discount accretion/premium amortization | 10,179 | 1,806 |
Changes in fair value | 21,131 | 20,893 |
Unrealized foreign currency remeasurement (loss) gain | -45,907 | 3,629 |
Change in loan loss allowance, net | -317 | -497 |
Transfer to/from other asset classifications | 1,038 | |
Balance at the end of the period | $6,479,595 | $4,964,802 |
Investment_Securities_Details
Investment Securities (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
item | item | ||
Investment Securities | |||
Investment securities | $1,021,311,000 | $998,248,000 | |
Purchases | 67,247,000 | 9,890,000 | |
Sales | 4,713,000 | 27,883,000 | |
Principal collections | 11,737,000 | 8,227,000 | |
Number of CMBS classified as HTM | 4 | 4 | |
Before consolidation of securitization VIEs | |||
Investment Securities | |||
Investment securities | 1,614,901,000 | 1,518,070,000 | |
Available-for-sale | |||
Investment Securities | |||
Purchase Amortized Cost | 250,600,000 | 257,418,000 | |
Credit OTTI | -10,197,000 | -10,197,000 | |
Recorded Amortized Cost | 240,403,000 | 247,221,000 | |
Non-Credit OTTI | -197,000 | ||
Gross Unrealized Gains | 52,070,000 | 60,378,000 | |
Gross Unrealized Losses | -179,000 | ||
Net Fair Value Adjustment | 51,891,000 | 60,181,000 | |
Fair Value | 292,294,000 | 307,402,000 | |
Description of variable rate basis | one-month LIBOR | one-month LIBOR | |
Effective variable rate basis (as a percent) | 0.18% | 0.17% | |
Fair value option | VIE eliminations | |||
Investment Securities | |||
Investment securities | -593,590,000 | -519,822,000 | |
Held-to-maturity | |||
Investment Securities | |||
Purchases | 58,509,000 | ||
Principal collections | 25,000 | ||
Held-to-maturity | Before consolidation of securitization VIEs | |||
Investment Securities | |||
Investment securities | 501,686,000 | 441,995,000 | |
RMBS | |||
Investment Securities | |||
Description of variable rate basis | LIBOR | LIBOR | |
Portion of securities with variable rate | 137,400,000 | ||
RMBS | Available-for-sale | |||
Investment Securities | |||
Sales | 9,309,000 | ||
Principal collections | 11,487,000 | 7,819,000 | |
Purchase Amortized Cost | 161,692,000 | 163,733,000 | |
Credit OTTI | -10,197,000 | -10,197,000 | |
Recorded Amortized Cost | 151,495,000 | 153,536,000 | |
Non-Credit OTTI | -197,000 | ||
Gross Unrealized Gains | 46,069,000 | 53,714,000 | |
Gross Unrealized Losses | -179,000 | ||
Net Fair Value Adjustment | 45,890,000 | 53,517,000 | |
Fair Value | 197,385,000 | 207,053,000 | |
Portion of securities with variable rate | 140,100,000 | ||
Portion of securities with variable rate (as a percent) | 69.60% | 67.70% | |
Variable rate, weighted average spread (as a percent) | 0.44% | 0.44% | |
Principal balance | 258,755,000 | 270,783,000 | |
Accretable yield | -82,242,000 | -85,495,000 | |
Non-accretable difference | -25,018,000 | -31,752,000 | |
Total discount | -107,260,000 | -117,247,000 | |
Amortized cost | 151,495,000 | 153,536,000 | |
Credit deteriorated RMBS | 217,800,000 | 222,900,000 | |
Accretable yield related to credit deteriorated RMBS | 67,600,000 | 66,600,000 | |
Changes to accretable yield | |||
Balance at the beginning of the period | 85,495,000 | 101,046,000 | 101,046,000 |
Accretion of discount | -9,445,000 | -6,564,000 | |
Sales | -1,962,000 | ||
OTTI | 213,000 | ||
Transfer to/from non-accretable difference | 6,192,000 | 6,889,000 | |
Balance at the end of the period | 82,242,000 | 99,622,000 | 85,495,000 |
Changes to non accretable difference | |||
Balance at the beginning of the period | 31,752,000 | 70,196,000 | 70,196,000 |
Principal write-downs | -542,000 | -366,000 | |
Sales | -7,509,000 | ||
Transfer to/from non-accretable difference | -6,192,000 | -6,889,000 | |
Balance at the end of the period | 25,018,000 | 55,432,000 | 31,752,000 |
RMBS | Available-for-sale | B- | |||
Investment Securities | |||
Weighted Average Coupon (as a percent) | 1.10% | 1.10% | |
WAL | 5 years 9 months 18 days | 5 years 9 months 18 days | |
RMBS | Available-for-sale | Before consolidation of securitization VIEs | |||
Investment Securities | |||
Investment securities | 197,385,000 | 207,053,000 | |
CMBS | Available-for-sale | |||
Investment Securities | |||
Principal collections | 224,000 | 408,000 | |
Purchase Amortized Cost | 88,908,000 | 93,685,000 | |
Recorded Amortized Cost | 88,908,000 | 93,685,000 | |
Gross Unrealized Gains | 6,001,000 | 6,664,000 | |
Net Fair Value Adjustment | 6,001,000 | 6,664,000 | |
Fair Value | 94,909,000 | 100,349,000 | |
Portion of securities with variable rate | 0 | 200,000 | |
Portion of securities with variable rate (as a percent) | 0.20% | ||
Principal balance | 88,908,000 | 93,685,000 | |
Amortized cost | 88,908,000 | 93,685,000 | |
CMBS | Available-for-sale | BB+ | |||
Investment Securities | |||
Weighted Average Coupon (as a percent) | 11.60% | 11.60% | |
WAL | 4 months 24 days | 3 years 2 months 12 days | |
CMBS | Available-for-sale | Before consolidation of securitization VIEs | |||
Investment Securities | |||
Investment securities | 94,909,000 | 100,349,000 | |
CMBS | Fair value option | |||
Investment Securities | |||
Purchases | 8,738,000 | 9,890,000 | |
Sales | 4,713,000 | 18,574,000 | |
Principal collections | 1,000 | ||
Weighted Average Coupon (as a percent) | 3.90% | 3.90% | |
WAL | 8 years 1 month 6 days | 7 years 8 months 12 days | |
CMBS | Fair value option | Before consolidation of securitization VIEs | |||
Investment Securities | |||
Investment securities | 806,876,000 | 753,553,000 | |
Equity security | Fair value option | Before consolidation of securitization VIEs | |||
Investment Securities | |||
Investment securities | $14,045,000 | $15,120,000 |
Investment_Securities_Details_
Investment Securities (Details 2) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Available-for-sale | |||
Estimated Fair Value | |||
Securities with a loss greater than 12 months | $679,000 | $682,000 | |
Unrealized Losses | |||
Securities with a loss greater than 12 months | -179,000 | -197,000 | |
RMBS | Available-for-sale | |||
Investment Securities | |||
Maximum investment in available-for-sale securities with aggregate expected modified durations of less than 12 months (as a percent) | 10.00% | ||
Cost of third party management | 400,000 | 600,000 | |
Estimated Fair Value | |||
Securities with a loss greater than 12 months | 679,000 | 682,000 | |
Unrealized Losses | |||
Securities with a loss greater than 12 months | -179,000 | -197,000 | |
CMBS | Fair value option | |||
Unrealized Losses | |||
Unpaid principal balance of investment securities before consolidation of VIEs | 4,400,000,000 | ||
Purchases in which fair value option was elected | 60,300,000 | ||
Purchase amount reflected as repayment of debt of consolidated VIEs | $51,500,000 |
Investment_Securities_Details_1
Investment Securities (Details 3) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Mar. 31, 2015 | |
HTM Securities | |||
Net Carrying Amount (Amortized Cost) | $441,995,000 | $501,686,000 | |
Gross Unrealized Holdings Gains | 5,000 | ||
Gross Unrealized Holdings Losses | -1,366,000 | -2,436,000 | |
Fair Value | 440,629,000 | 499,255,000 | |
Preferred equity interest maturing July 2015 | |||
HTM Securities | |||
Purchase of investments | 37,200,000 | ||
Preferred Equity Investment | |||
HTM Securities | |||
Net Carrying Amount (Amortized Cost) | 307,465,000 | 308,582,000 | |
Gross Unrealized Holdings Losses | -1,366,000 | -2,370,000 | |
Fair Value | 306,099,000 | 306,212,000 | |
Number of securities originated | 2 | ||
Preferred Equity Investment | Preferred equity interest maturing February 2023 | |||
HTM Securities | |||
Purchase of investments | 19,000,000 | ||
Preferred Equity Investment | Preferred equity interest maturing December 2018 | |||
HTM Securities | |||
Purchase of investments | 246,100,000 | ||
CMBS | |||
HTM Securities | |||
Net Carrying Amount (Amortized Cost) | 134,530,000 | 193,104,000 | |
Gross Unrealized Holdings Gains | 5,000 | ||
Gross Unrealized Holdings Losses | -66,000 | ||
Fair Value | 134,530,000 | 193,043,000 | |
Number of securities originated | 2 | ||
CMBS | CMBS security maturing November 2016 | |||
HTM Securities | |||
Face value | 25,500,000 | ||
Purchase of investments | 84,100,000 | 25,400,000 | |
CMBS | CMBS security maturing December 2016 | |||
HTM Securities | |||
Face value | 25,000,000 | ||
Purchase of investments | 25,000,000 | ||
CMBS | CMBS security maturing March 2017 | |||
HTM Securities | |||
Face value | 59,000,000 | ||
Purchase of investments | $58,500,000 |
Investment_Securities_Details_2
Investment Securities (Details 4) (SEREF, USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 |
SEREF | |||
Residential Real Estate | |||
Number of shares acquired | 9,140,000 | ||
Fair value of investment | $14 | $15.10 |
Investment_in_Unconsolidated_E2
Investment in Unconsolidated Entities (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Investment in Unconsolidated Entities | |||
Equity method, Carrying value | $192,775 | $176,359 | |
Carrying value over (under) equity in net assets | -3,025 | ||
Cost method, Carrying value | 17,058 | 17,624 | |
Investment in unconsolidated entities | 209,833 | 193,983 | |
Income recognized | 6,090 | 64 | |
Minimum | |||
Investment in Unconsolidated Entities | |||
Cost method, Ownership % | 2.00% | ||
Maximum | |||
Investment in Unconsolidated Entities | |||
Cost method, Ownership % | 10.00% | ||
Retail fund | |||
Investment in Unconsolidated Entities | |||
Equity method, Participation / Ownership % | 33.00% | ||
Equity method, Carrying value | 128,308 | 129,475 | |
Income recognized | 2,600 | ||
Investor entity which owns equity in two real estate services providers | |||
Investment in Unconsolidated Entities | |||
Equity method, Participation / Ownership % | 50.00% | ||
Equity method, Carrying value | 21,888 | 21,534 | |
Equity interests in office properties | |||
Investment in Unconsolidated Entities | |||
Equity method, Carrying value | 28,149 | ||
Equity interests in office properties | Minimum | |||
Investment in Unconsolidated Entities | |||
Equity method, Participation / Ownership % | 16.00% | ||
Equity interests in office properties | Maximum | |||
Investment in Unconsolidated Entities | |||
Equity method, Participation / Ownership % | 43.00% | ||
Bridge loan venture | |||
Investment in Unconsolidated Entities | |||
Equity method, Carrying value | 8,329 | 8,417 | |
Carrying value over (under) equity in net assets | 65 | ||
Various - Equity method | |||
Investment in Unconsolidated Entities | |||
Equity method, Carrying value | 6,101 | 16,933 | |
Carrying value over (under) equity in net assets | -3,090 | ||
Various - Equity method | Minimum | |||
Investment in Unconsolidated Entities | |||
Equity method, Participation / Ownership % | 25.00% | ||
Various - Equity method | Maximum | |||
Investment in Unconsolidated Entities | |||
Equity method, Participation / Ownership % | 50.00% | ||
Investment funds which own equity in a loan servicer and other real estate assets | |||
Investment in Unconsolidated Entities | |||
Cost method, Carrying value | 9,225 | 9,225 | |
Investment funds which own equity in a loan servicer and other real estate assets | Minimum | |||
Investment in Unconsolidated Entities | |||
Cost method, Ownership % | 4.00% | ||
Investment funds which own equity in a loan servicer and other real estate assets | Maximum | |||
Investment in Unconsolidated Entities | |||
Cost method, Ownership % | 6.00% | ||
Various - Cost method | |||
Investment in Unconsolidated Entities | |||
Cost method, Carrying value | $7,833 | $8,399 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Servicing rights | |||
Total servicing rights | $138,802,000 | $168,056,000 | $144,152,000 |
Accumulated amortization at end of period, net of foreign exchange effect | -23,723,000 | -12,559,000 | |
European servicing rights | |||
Servicing rights | |||
Net carrying value at the beginning of the period | 11,849,000 | 27,024,000 | |
Foreign exchange (loss) gain | -504,000 | 145,000 | |
Amortization | -3,304,000 | -4,011,000 | |
Net carrying value at the end of the period | 8,041,000 | 23,158,000 | |
Fair value at the beginning of the period | 12,700,000 | 29,300,000 | |
Fair value at the end of the period | 11,200,000 | 24,400,000 | |
Domestic Servicing Rights | |||
Servicing rights, at fair value | |||
Fair value at the beginning of the period | 132,303,000 | 150,149,000 | |
Changes in fair value due to changes in inputs and assumptions | -1,542,000 | -5,251,000 | |
Fair value at the end of the period | 130,761,000 | 144,898,000 | |
Domestic Servicing Rights | Before consolidation of securitization VIEs | |||
Servicing rights, at fair value | |||
Fair value at the beginning of the period | 178,400,000 | ||
Fair value at the end of the period | 173,500,000 | 178,400,000 | |
Domestic Servicing Rights | VIE eliminations | |||
Servicing rights, at fair value | |||
Fair value at the beginning of the period | 46,100,000 | ||
Fair value at the end of the period | $42,700,000 | $46,100,000 |
Secured_Financing_Agreements_D
Secured Financing Agreements (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2015 | Feb. 28, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 30, 2015 | |
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 7,568,541,000 | $7,568,541,000 | ||||
Maximum Facility Size | 4,441,378,000 | 4,441,378,000 | ||||
Carrying Value | 3,711,834,000 | 3,711,834,000 | 3,137,789,000 | |||
Lender 1 Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 1,474,127,000 | 1,474,127,000 | ||||
Maximum Facility Size | 1,250,000,000 | 1,250,000,000 | ||||
Carrying Value | 1,040,651,000 | 1,040,651,000 | 875,111,000 | |||
Lender 1 Repo 1 Facility | Minimum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 1.85% | |||||
Lender 1 Repo 1 Facility | Maximum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 5.25% | |||||
Lender 1 Repo 2 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 195,032,000 | 195,032,000 | ||||
Maximum Facility Size | 125,000,000 | 125,000,000 | ||||
Carrying Value | 117,125,000 | 117,125,000 | 101,886,000 | |||
Current maturity period, relative to when the buyer delivers notice to the seller | 180 days | |||||
Lender 1 Repo 2 Facility | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 1.90% | |||||
Lender 2 Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 410,800,000 | 410,800,000 | ||||
Maximum Facility Size | 325,000,000 | 325,000,000 | ||||
Carrying Value | 304,596,000 | 304,596,000 | 240,188,000 | |||
Lender 2 Repo 1 Facility | Minimum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 1.75% | |||||
Lender 2 Repo 1 Facility | Maximum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.75% | |||||
Lender 3 Repo I Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 177,443,000 | 177,443,000 | ||||
Maximum Facility Size | 123,366,000 | 123,366,000 | ||||
Carrying Value | 123,366,000 | 123,366,000 | 124,250,000 | |||
Lender 3 Repo I Facility | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.85% | |||||
Conduit Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 72,603,000 | 72,603,000 | ||||
Maximum Facility Size | 150,000,000 | 150,000,000 | ||||
Carrying Value | 53,513,000 | 53,513,000 | 94,727,000 | |||
Repayment of secured financings | ||||||
2015 (remainder of) | 239,700,000 | 239,700,000 | ||||
Conduit Repo 1 Facility | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 1.90% | |||||
Conduit Repo 2 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 155,532,000 | 155,532,000 | ||||
Maximum Facility Size | 150,000,000 | 150,000,000 | ||||
Carrying Value | 115,376,000 | 115,376,000 | 113,636,000 | |||
Conduit Repo 2 Facility | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.10% | |||||
Conduit Repo 3 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 96,419,000 | 96,419,000 | ||||
Maximum Facility Size | 150,000,000 | 150,000,000 | ||||
Carrying Value | 70,826,000 | 70,826,000 | ||||
Maturity period | 3 years | |||||
Extended term | 1 year | |||||
Conduit Repo 3 Facility | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.10% | |||||
Lender 4 Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 396,381,000 | 396,381,000 | ||||
Maximum Facility Size | 311,178,000 | 311,178,000 | ||||
Carrying Value | 311,178,000 | 311,178,000 | 327,117,000 | |||
Lender 4 Repo 1 Facility | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.60% | |||||
Lender 5 Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Carrying Value | 58,079,000 | |||||
Lender 6 Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 572,477,000 | 572,477,000 | ||||
Maximum Facility Size | 500,000,000 | 500,000,000 | ||||
Carrying Value | 398,201,000 | 398,201,000 | 296,967,000 | |||
Lender 6 Repo 1 Facility | Minimum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.75% | |||||
Lender 6 Repo 1 Facility | Maximum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 3.00% | |||||
Lender 7 Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 50,377,000 | 50,377,000 | ||||
Maximum Facility Size | 39,024,000 | 39,024,000 | ||||
Carrying Value | 39,024,000 | 39,024,000 | 39,024,000 | |||
Lender 7 Repo 1 Facility | Minimum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.60% | |||||
Lender 7 Repo 1 Facility | Maximum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.70% | |||||
Lender 8 Mortgage Facility | ||||||
Secured Financing Agreements | ||||||
Interest rate (as a percent) | 4.59% | 4.59% | ||||
Pledged Asset Carrying Value | 17,904,000 | 17,904,000 | ||||
Maximum Facility Size | 14,000,000 | 14,000,000 | ||||
Carrying Value | 14,000,000 | 14,000,000 | 14,000,000 | |||
Lender 9 Repo 1 Facility | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 275,061,000 | 275,061,000 | ||||
Maximum Facility Size | 190,463,000 | 190,463,000 | ||||
Carrying Value | 190,463,000 | 190,463,000 | ||||
Maturity period | 12 months | |||||
Lender 9 Repo 1 Facility | Minimum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 1.40% | |||||
Lender 9 Repo 1 Facility | Maximum | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 1.85% | |||||
Borrowing Base | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 1,009,289,000 | 1,009,289,000 | ||||
Maximum Facility Size | 450,000,000 | 450,000,000 | ||||
Carrying Value | 272,173,000 | 272,173,000 | 189,871,000 | |||
Floor interest rate (as a percent) | 0.75% | |||||
Repayment of secured financings | ||||||
2015 (remainder of) | 272,200,000 | 272,200,000 | ||||
Maximum borrowing capacity | 450,000,000 | 450,000,000 | 250,000,000 | |||
Borrowing Base | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 3.25% | |||||
Term Loan | ||||||
Secured Financing Agreements | ||||||
Pledged Asset Carrying Value | 2,665,096,000 | 2,665,096,000 | ||||
Maximum Facility Size | 663,347,000 | 663,347,000 | ||||
Carrying Value | 661,342,000 | 661,342,000 | 662,933,000 | |||
Floor interest rate (as a percent) | 0.75% | |||||
Unamortized discount | 2,000,000 | 2,000,000 | 2,100,000 | |||
Term Loan | LIBOR | ||||||
Secured Financing Agreements | ||||||
Pricing margin (as a percent) | 2.75% | |||||
Secured financing agreements | ||||||
Secured Financing Agreements | ||||||
Unamortized discount | 2,000,000 | 2,000,000 | ||||
Repayment of secured financings | ||||||
2015 (remainder of) | 539,658,000 | 539,658,000 | ||||
2016 | 212,114,000 | 212,114,000 | ||||
2017 | 1,088,785,000 | 1,088,785,000 | ||||
2018 | 462,317,000 | 462,317,000 | ||||
2019 | 765,770,000 | 765,770,000 | ||||
Thereafter | 645,195,000 | 645,195,000 | ||||
Total | 3,713,839,000 | 3,713,839,000 | ||||
Deferred financing costs, net of amortization | 24,300,000 | 24,300,000 | 26,500,000 | |||
Additional non-cash interest expense | 3,500,000 | $2,900,000 |
Convertible_Senior_Notes_Detai
Convertible Senior Notes (Details) (USD $) | 3 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Oct. 08, 2014 | Feb. 15, 2013 | Jul. 03, 2013 | Dec. 31, 2014 | |
Convertible Senior Notes | ||||||
Gains (Losses) on Extinguishment of Debt | ($5,292,000) | |||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | -15,669,000 | |||||
Conversion spread included in computation of diluted EPS (in shares) | 5,353,000 | 3,196,000 | ||||
Conversion upon satisfaction of closing market price condition | ||||||
Convertible Senior Notes | ||||||
Minimum number of conditions to be satisfied for conversion of debt | 1 | |||||
Minimum trading period as a basis for debt conversion | 20 | |||||
Consecutive trading period as a basis for debt conversion | 30 days | |||||
Conversion upon satisfaction of closing market price condition | Minimum | ||||||
Convertible Senior Notes | ||||||
Percentage of per share value of distributions that exceeds the market price of the entity's common stock as a basis for debt conversion | 10.00% | |||||
Conversion upon satisfaction of closing market price condition | Maximum | ||||||
Convertible Senior Notes | ||||||
Period of average closing market price of common stock as a basis for debt conversion | 10 days | |||||
Conversion upon satisfaction of trading price condition | ||||||
Convertible Senior Notes | ||||||
Consecutive trading period as a basis for debt conversion | 5 days | |||||
Conversion upon satisfaction of trading price condition | Maximum | ||||||
Convertible Senior Notes | ||||||
Percentage of conversion price and last reported sales price as a basis for debt conversion | 98.00% | |||||
2017 Notes | ||||||
Convertible Senior Notes | ||||||
Amount issued | 431,250,000 | 431,300,000 | ||||
Coupon Rate (as a percent) | 3.75% | |||||
Effective Rate (as a percent) | 5.87% | |||||
Conversion Rate | 41.7397 | |||||
Remaining Period of Amortization | 2 years 6 months | |||||
Amount by which if-converted value of the Notes exceed principal amount | 6,100,000 | |||||
Conversion price (in dollars per share) | $23.96 | |||||
2017 Notes | Conversion upon satisfaction of closing market price condition | Minimum | ||||||
Convertible Senior Notes | ||||||
Percentage of conversion price as a basis for debt conversion | 110.00% | |||||
2018 Notes | ||||||
Convertible Senior Notes | ||||||
Amount issued | 599,981,000 | 600,000,000 | ||||
Coupon Rate (as a percent) | 4.55% | |||||
Effective Rate (as a percent) | 6.10% | |||||
Conversion Rate | 45.3639 | |||||
Remaining Period of Amortization | 2 years 10 months 24 days | |||||
Amount by which if-converted value of the Notes exceed principal amount | 61,500,000 | |||||
Conversion price (in dollars per share) | $22.04 | |||||
2018 Notes | Conversion upon satisfaction of closing market price condition | ||||||
Convertible Senior Notes | ||||||
Percentage of conversion price as a basis for debt conversion | 130.00% | |||||
2019 Notes | ||||||
Convertible Senior Notes | ||||||
Amount issued | 355,872,000 | 460,000,000 | ||||
Coupon Rate (as a percent) | 4.00% | |||||
Effective Rate (as a percent) | 5.37% | |||||
Conversion Rate | 48.2112 | |||||
Remaining Period of Amortization | 3 years 9 months 18 days | |||||
Amount by which if-converted value of the Notes exceed principal amount | 61,100,000 | |||||
Conversion price (in dollars per share) | $20.74 | |||||
Amount of debt repurchased | 104,100,000 | |||||
Debt repurchased amount | 119,800,000 | |||||
Repurchase expenses | 100,000 | |||||
Gains (Losses) on Extinguishment of Debt | 5,300,000 | |||||
Convertible Senior Notes | ||||||
Convertible Senior Notes | ||||||
Principal Amount | 1,387,103,000 | 1,491,228,000 | ||||
Net unamortized discount | -62,978,000 | -73,206,000 | ||||
Carrying amount of debt components | 1,324,125,000 | 1,418,022,000 | ||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | 48,401,000 | 64,070,000 | ||||
Principal amount of notes, basis for conversion | 1,000 | |||||
Closing share price (in dollars per share) | $24.30 | |||||
Conversion of principal not included in computation of diluted EPS (in shares | 57,000,000 | |||||
Conversion spread included in computation of diluted EPS (in shares) | 5,400,000 | |||||
Deferred financing costs, net of amortization | $2,000,000 | $2,300,000 |
Loan_SecuritizationSale_Activi2
Loan Securitization/Sale Activities (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Loan Transfer Activities | ||
Par value of loans held-for-sale, sold during period | $464,600,000 | $289,400,000 |
Fair value of loans held-for-sale, sold during period | 482,000,000 | 302,500,000 |
Amount repaid for outstanding balance | 344,400,000 | 217,000,000 |
Repurchase agreements | ||
Loan Transfer Activities | ||
Amount repaid for outstanding balance | 344,400,000 | |
Repurchase agreements | Real Estate Investment Lending | ||
Loan Transfers Accounted for as Sales | ||
Face Amount | 85,500,000 | 147,884,000 |
Proceeds | $85,121,000 | $146,400,000 |
Derivatives_and_Hedging_Activi2
Derivatives and Hedging Activity (Details) | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 |
Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Credit spread instrument | |
Derivatives designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | |
USD ($) | Long | Long | Long | Short | Short | Short | GBP | EUR | SEK | SEK | NOK | DKK | USD ($) | |
instrument | USD ($) | Minimum | Maximum | USD ($) | Minimum | Maximum | Short | Short | Long | Short | Short | Short | instrument | |
instrument | instrument | GBP (£) | EUR (€) | instrument | instrument | instrument | instrument | |||||||
instrument | instrument | |||||||||||||
Derivatives | ||||||||||||||
Number of derivative instruments held | 8 | 58 | 3 | 58 | 32 | 1 | 2 | 1 | 1 | 11 | ||||
Notional amount of derivative instruments | $100.60 | $445.90 | $12.30 | £ 288 | € 131.40 | 4.1 | 19.7 | 1.3 | 3.2 | $40 | ||||
Fixed monthly coupons at fixed rate, low end of range (as a percent) | 0.56% | |||||||||||||
Fixed monthly coupons at fixed rate, high end of range (as a percent) | 2.23% | |||||||||||||
Amount expected to be reclassified from other comprehensive income to interest expense over the next twelve months | $0.60 | |||||||||||||
Hedging period for covering exposure to the variability in future cash flows | 74 months | |||||||||||||
Maturity period | 2 years | 10 years | 1 year | 10 years |
Derivatives_and_Hedging_Activi3
Derivatives and Hedging Activity (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair value of derivative instruments | ||
Fair Value of Derivatives in an Asset Position | $58,601 | $26,628 |
Fair Value of Derivatives in a Liability Position | 11,945 | 5,476 |
Derivatives designated as hedging instruments | ||
Fair value of derivative instruments | ||
Fair Value of Derivatives in an Asset Position | 30 | 138 |
Fair Value of Derivatives in a Liability Position | 389 | 235 |
Derivatives not designated as hedging instruments | ||
Fair value of derivative instruments | ||
Fair Value of Derivatives in an Asset Position | 58,571 | 26,490 |
Fair Value of Derivatives in a Liability Position | 11,556 | 5,241 |
Interest rate swap | Derivatives designated as hedging instruments | ||
Fair value of derivative instruments | ||
Fair Value of Derivatives in an Asset Position | 30 | 138 |
Fair Value of Derivatives in a Liability Position | 389 | 235 |
Interest rate swap | Derivatives not designated as hedging instruments | ||
Fair value of derivative instruments | ||
Fair Value of Derivatives in an Asset Position | 1,037 | 1,128 |
Fair Value of Derivatives in a Liability Position | 11,226 | 5,216 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ||
Fair value of derivative instruments | ||
Fair Value of Derivatives in an Asset Position | 56,796 | 24,388 |
Fair Value of Derivatives in a Liability Position | 255 | 15 |
Credit spread instrument | Derivatives not designated as hedging instruments | ||
Fair value of derivative instruments | ||
Fair Value of Derivatives in an Asset Position | 738 | 974 |
Fair Value of Derivatives in a Liability Position | $75 | $10 |
Derivatives_and_Hedging_Activi4
Derivatives and Hedging Activity (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivatives | ||
Gain (loss) on derivative financial instruments, net | $24,623 | ($7,866) |
Derivatives not designated as hedging instruments | ||
Derivatives | ||
Gain (loss) on derivative financial instruments, net | 24,623 | -7,866 |
Interest rate swap | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Gain (loss) on derivative financial instruments, net | -12,923 | -4,197 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Gain (loss) on derivative financial instruments, net | 37,972 | -3,047 |
Credit spread instrument | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Gain (loss) on derivative financial instruments, net | -426 | -622 |
Cash flow hedges | Interest rate swap | Derivatives designated as hedging instruments | ||
Derivatives | ||
(Loss) Gain Recognized in OCI (effective portion) | -467 | -251 |
(Loss) Reclassified from AOCI into Income (effective portion) | ($204) | ($373) |
Offsetting_Assets_and_Liabilit2
Offsetting Assets and Liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Net Amounts of Assets Presented in the Statement of Financial Position | $58,601 | $26,628 |
Liabilities | ||
Gross Amounts of Recognized Liabilities | 2,776,264 | 2,276,461 |
Net Amounts of Liabilities Presented in the Statement of Financial | 2,776,264 | 2,276,461 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 2,765,123 | 2,273,001 |
Cash Collateral Pledged | 11,141 | 3,460 |
Derivatives | ||
Assets | ||
Gross Amounts of Recognized Assets | 58,601 | 26,628 |
Net Amounts of Assets Presented in the Statement of Financial Position | 58,601 | 26,628 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 804 | 2,016 |
Net Amount | 57,797 | 24,612 |
Liabilities | ||
Gross Amounts of Recognized Liabilities | 11,945 | 5,476 |
Net Amounts of Liabilities Presented in the Statement of Financial | 11,945 | 5,476 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | -804 | -2,016 |
Cash Collateral Pledged | 11,141 | 3,460 |
Repurchase agreements | ||
Liabilities | ||
Gross Amounts of Recognized Liabilities | 2,764,319 | 2,270,985 |
Net Amounts of Liabilities Presented in the Statement of Financial | 2,764,319 | 2,270,985 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | $2,764,319 | $2,270,985 |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (Not primary beneficiary, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
item | |
Variable interest entities | |
Number of CDO structures currently in default | 1 |
Number of CDO structures currently ceased to be in default | 1 |
Maximum risk of loss related to VIEs, on fair value basis | $213,300,000 |
Securitization SPEs | |
Variable interest entities | |
Debt obligations to beneficial interest holders, unpaid principal balances | $46,000,000,000 |
RelatedParty_Transactions_Deta
Related-Party Transactions (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Jan. 31, 2014 | Oct. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2014 |
Related-Party Transactions | |||||
Number of units granted | 123,492 | ||||
Starwood Property Trust, Inc. Manager Equity Plan | |||||
Related-Party Transactions | |||||
Number of units granted | 2,489,281 | ||||
Starwood Property Trust, Inc. Manager Equity Plan | Restricted stock units | |||||
Related-Party Transactions | |||||
Number of units granted | 2,000,000 | 875,000 | |||
Share-based compensation expense | 7 | $6.70 | |||
Manager | |||||
Related-Party Transactions | |||||
Base management fee incurred | 13.9 | 13.2 | |||
Base management fee payable | 13.9 | ||||
Incentive fee incurred | 6.7 | 7.2 | |||
Incentive fees payable | 6.7 | 18.9 | |||
Executive compensation and other reimbursable expenses | 1.3 | 1.9 | |||
Executive compensation and other reimbursable expense payable | 3.6 | $3.40 |
RelatedParty_Transactions_Deta1
Related-Party Transactions (Details 2) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | ||||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Jan. 31, 2015 | Dec. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | |
USD ($) | USD ($) | USD ($) | Co-origination of loan with SEREF | SEREF | Retail fund | Retail fund | Fund IX | Fund IX | Fund IX | Mammoth Mezz Holdings, LLC | |
Junior Mezzanine Loan | USD ($) | USD ($) | CMBS | LNR | LNR | Mammoth Loan Investment | |||||
EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||
property | |||||||||||
Related-Party Transactions | |||||||||||
Payments to acquire security | $58,600,000 | ||||||||||
Number of properties by which investment is secured | 85 | ||||||||||
Sale of participation interest in subordinated loan | 35,000,000 | ||||||||||
Participation interest in security | 18,000,000 | ||||||||||
Variable rate basis of loans | LIBOR | ||||||||||
Spread on interest rate basis (as a percent) | 5.90% | 8.81% | |||||||||
Originations of mortgage financing | 1,063,108,000 | 981,762,000 | |||||||||
Purchase price of notes | 649,886,000 | 728,594,000 | |||||||||
Number of shares acquired | 9,140,000 | ||||||||||
Equity method, Carrying value | 192,775,000 | 176,359,000 | 128,308,000 | 129,475,000 | |||||||
Equity interest acquired (as a percent) | 33.00% | ||||||||||
Earnings from unconsolidated entities | 6,090,000 | 64,000 | 2,600,000 | ||||||||
Obligation funded by an affiliate | 6,200,000 | ||||||||||
Related party payable | $3,500,000 | $4,400,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 1 Months Ended | 3 Months Ended | 0 Months Ended | |
Sep. 30, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | 5-May-15 | |
Stockholders' Equity | ||||
Dividend declared (in dollars per share) | $0.48 | $0.48 | ||
Value of shares that may be issued under the ATM Agreement | $0 | |||
Authorized amount of share repurchases | 250,000,000 | |||
Period for repurchase of common stock | 1 year | |||
Remaining capacity under repurchase program | 117,100,000 | |||
Subsequent event | ||||
Stockholders' Equity | ||||
Dividend declared (in dollars per share) | $0.48 | |||
2019 Notes | ||||
Stockholders' Equity | ||||
Amount of debt repurchased | $104,100,000 |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended |
Mar. 31, 2015 | Jan. 24, 2014 | Jan. 31, 2014 | Aug. 12, 2014 | Oct. 31, 2012 | |
Equity Incentive Plans | |||||
Awards granted (in shares) | 123,492 | ||||
Spin off | Single Family Residential | |||||
Equity Incentive Plans | |||||
Share exchange ratio | 0.2 | 0.2 | |||
Starwood Property Trust, Inc. Equity Plan and Manager Equity Plan | |||||
Equity Incentive Plans | |||||
Number of additional shares authorized | 489,281 | ||||
Number of shares available for future grants | 3,700,000 | ||||
Starwood Property Trust, Inc. Equity Plan | |||||
Equity Incentive Plans | |||||
Awards granted (in shares) | 123,492 | ||||
Starwood Property Trust, Inc. Manager Equity Plan | |||||
Equity Incentive Plans | |||||
Awards granted (in shares) | 2,489,281 | ||||
Starwood Property Trust, Inc. Manager Equity Plan | Restricted stock units | |||||
Equity Incentive Plans | |||||
Awards granted (in shares) | 2,000,000 | 875,000 | |||
Awards granted, fair value | 55,420,000 | $19,854,000 | |||
Award vesting period | 3 years | 3 years | |||
Starwood Property Trust, Inc. Manager Equity Plan | Restricted stock units | Spin off | |||||
Equity Incentive Plans | |||||
Awards granted (in shares) | 489,281 | ||||
Awards granted, fair value | 14,776,000 | ||||
Award vesting period | 3 years |
Stockholders_Equity_Details_3
Stockholders' Equity (Details 3) (USD $) | 3 Months Ended | 1 Months Ended | |
Mar. 31, 2015 | Jan. 31, 2014 | Dec. 31, 2014 | |
Non-Vested Shares and Share Equivalents activity | |||
Beginning Balance (in shares) | 1,981,398 | ||
Granted (in shares) | 123,492 | ||
Vested (in shares) | -300,816 | ||
Forfeited (in shares) | -1,007 | ||
Balance at the end of period (in shares) | 1,803,067 | ||
Weighted Average Grant Date Fair Value (per share) | |||
Balance at the beginning of period (in dollars per share) | $27.30 | ||
Granted (in dollars per share) | $24.17 | ||
Vested (in dollars per share) | $26.73 | ||
Forfeited (in dollars per share) | $24.11 | ||
Balance at the end of period (in dollars per share) | $27.18 | ||
Starwood Property Trust, Inc. Equity Plan and Manager Equity Plan | |||
Non-Vested Shares and Share Equivalents activity | |||
Beginning Balance (in shares) | 17,105 | ||
Balance at the end of period (in shares) | 17,105 | 17,105 | |
Starwood Property Trust, Inc. Equity Plan | |||
Non-Vested Shares and Share Equivalents activity | |||
Beginning Balance (in shares) | 109,708 | ||
Granted (in shares) | 123,492 | ||
Vested (in shares) | -14,538 | ||
Forfeited (in shares) | -1,007 | ||
Balance at the end of period (in shares) | 217,655 | ||
Starwood Property Trust, Inc. Manager Equity Plan | |||
Non-Vested Shares and Share Equivalents activity | |||
Beginning Balance (in shares) | 1,854,585 | ||
Granted (in shares) | 2,489,281 | ||
Vested (in shares) | -286,278 | ||
Balance at the end of period (in shares) | 1,568,307 |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Continuing Operations: | ||
Income from continuing operations attributable to STWD common stockholders | $120,363 | $122,152 |
Less: Income attributable to unvested shares | -972 | -1,748 |
Basic - Income from continuing operations | 119,391 | 120,404 |
Discontinued Operations: | ||
Loss from discontinued operations | -1,551 | |
Basic - Net income attributable to STWD common stockholders after allocation to participating securities | 119,391 | 118,853 |
Continuing Operations: | ||
Basic - Income from continuing operations attributable to STWD common stockholders | 120,363 | 122,152 |
Less: Income attributable to unvested shares | -972 | -1,748 |
Add: Undistributed earnings to unvested shares | 106 | 366 |
Less: Undistributed earnings reallocated to unvested shares | -104 | -361 |
Diluted - Income from continuing operations | 119,393 | 120,409 |
Discontinued Operations: | ||
Basic - Loss from discontinued operations | -1,551 | |
Diluted - Net income attributable to STWD common stockholders after allocation to participating securities | $119,393 | $118,858 |
Number of Shares: | ||
Basic - Average shares outstanding | 223,541 | 195,524 |
Effect of dilutive securities - Convertible Notes (in shares) | 5,353 | 3,196 |
Effect of dilutive securities - Contingently Issuable Shares (in shares) | 138 | 156 |
Weighted Average Number of Shares Outstanding, Diluted, Total | 229,032 | 198,876 |
Basic: | ||
Income from continuing operations (in dollars per share) | $0.53 | $0.62 |
Loss from discontinued operations (in dollars per share) | ($0.01) | |
Net income (in dollars per share) | $0.53 | $0.61 |
Diluted: | ||
Income from continuing operations (in dollars per share) | $0.52 | $0.61 |
Loss from discontinued operations (in dollars per share) | ($0.01) | |
Net income (in dollars per share) | $0.52 | $0.60 |
Earnings_per_Share_Details_2
Earnings per Share (Details 2) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Antidilutive securities and effect of dilutive securities | ||
Effect of dilutive securities - Convertible Notes (in shares) | 5,353,000 | 3,196,000 |
2017 Notes | ||
Antidilutive securities and effect of dilutive securities | ||
Amount by which if-converted value of the Notes exceed principal amount | 6.1 | |
2018 Notes | ||
Antidilutive securities and effect of dilutive securities | ||
Amount by which if-converted value of the Notes exceed principal amount | 61.5 | |
2019 Notes | ||
Antidilutive securities and effect of dilutive securities | ||
Amount by which if-converted value of the Notes exceed principal amount | 61.1 | |
Convertible Senior Notes | ||
Antidilutive securities and effect of dilutive securities | ||
Potential shares of common stock contingently issuable upon conversion of the Convertible Notes | 62,400,000 | |
Shares excluded from diluted EPS calculations | 57,000,000 | |
Effect of dilutive securities - Convertible Notes (in shares) | 5,400,000 | |
Restricted stock | ||
Antidilutive securities and effect of dilutive securities | ||
Number of anti-dilutive common shares excluded from the calculation of diluted income per share | 1,800,000 | 2,900,000 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Changes in AOCI by component | ||
Beginning balance | $55,896 | $75,449 |
OCI before reclassifications | -11,342 | 4,778 |
Amounts reclassified from AOCI | -5,192 | -112 |
Net period OCI | -16,534 | 4,666 |
Ending balance | 39,362 | 80,115 |
Effective Portion of Cumulative Loss on Cash Flow Hedges | ||
Changes in AOCI by component | ||
Beginning balance | -97 | -604 |
OCI before reclassifications | -467 | -251 |
Amounts reclassified from AOCI | 204 | 373 |
Net period OCI | -263 | 122 |
Ending balance | -360 | -482 |
Cumulative Unrealized Gain on Available-for-Sale Securities | ||
Changes in AOCI by component | ||
Beginning balance | 60,190 | 66,566 |
OCI before reclassifications | -2,567 | 3,983 |
Amounts reclassified from AOCI | -5,396 | -485 |
Net period OCI | -7,963 | 3,498 |
Ending balance | 52,227 | 70,064 |
Foreign Currency Translation | ||
Changes in AOCI by component | ||
Beginning balance | -4,197 | 9,487 |
OCI before reclassifications | -8,308 | 1,046 |
Net period OCI | -8,308 | 1,046 |
Ending balance | ($12,505) | $10,533 |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Income | ||
Interest expense | ($50,534) | ($37,831) |
Interest income from investment securities | 27,744 | 29,454 |
OTTI | -213 | |
Net income | 120,779 | 120,881 |
Amounts Reclassified from AOCI | ||
Accumulated Other Comprehensive Income | ||
Net income | 5,192 | 112 |
Effective Portion of Cumulative Loss on Cash Flow Hedges | Interest rate contracts | Amounts Reclassified from AOCI | ||
Accumulated Other Comprehensive Income | ||
Interest expense | -204 | -373 |
Cumulative Unrealized Gain on Available-for-Sale Securities | Amounts Reclassified from AOCI | ||
Accumulated Other Comprehensive Income | ||
Interest income from investment securities | 5,396 | |
Gain on sale of investments, net | 698 | |
OTTI | -213 | |
Net income | $5,396 | $485 |
Fair_Value_Details
Fair Value (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets and liabilities measured at fair value | ||
Marketable securities | $1,021,311 | $998,248 |
Intangible assets - servicing rights held at fair value | 130,761 | 132,303 |
Derivative assets | 58,601 | 26,628 |
VIE Assets | 103,363,978 | 107,816,065 |
Derivative liabilities | 11,945 | 5,476 |
VIE Liabilities | 102,708,732 | 107,232,201 |
Fair value measurements on recurring basis | ||
Assets and liabilities measured at fair value | ||
Loans held-for-sale, fair value option | 343,770 | 391,620 |
Derivative assets | 58,601 | 26,628 |
VIE Assets | 103,363,978 | 107,816,065 |
Total | 104,416,735 | 108,922,869 |
Derivative liabilities | 11,945 | 5,476 |
VIE Liabilities | 102,708,732 | 107,232,201 |
Total | 102,720,677 | 107,237,677 |
Fair value measurements on recurring basis | Domestic Servicing Rights | ||
Assets and liabilities measured at fair value | ||
Intangible assets - servicing rights held at fair value | 130,761 | 132,303 |
Fair value measurements on recurring basis | RMBS | ||
Assets and liabilities measured at fair value | ||
Available-for-sale securities | 197,385 | 207,053 |
Fair value measurements on recurring basis | CMBS | ||
Assets and liabilities measured at fair value | ||
Available-for-sale securities | 308,195 | 334,080 |
Fair value measurements on recurring basis | Equity security | ||
Assets and liabilities measured at fair value | ||
Marketable securities | 14,045 | 15,120 |
Fair value measurements on recurring basis | Level I | ||
Assets and liabilities measured at fair value | ||
Total | 14,045 | 15,120 |
Fair value measurements on recurring basis | Level I | Equity security | ||
Assets and liabilities measured at fair value | ||
Marketable securities | 14,045 | 15,120 |
Fair value measurements on recurring basis | Level II | ||
Assets and liabilities measured at fair value | ||
Derivative assets | 58,601 | 26,628 |
Total | 58,601 | 26,628 |
Derivative liabilities | 11,945 | 5,476 |
VIE Liabilities | 100,563,274 | 102,339,081 |
Total | 100,575,219 | 102,344,557 |
Fair value measurements on recurring basis | Level III | ||
Assets and liabilities measured at fair value | ||
Loans held-for-sale, fair value option | 343,770 | 391,620 |
VIE Assets | 103,363,978 | 107,816,065 |
Total | 104,344,089 | 108,881,121 |
VIE Liabilities | 2,145,458 | 4,893,120 |
Total | 2,145,458 | 4,893,120 |
Fair value measurements on recurring basis | Level III | Domestic Servicing Rights | ||
Assets and liabilities measured at fair value | ||
Intangible assets - servicing rights held at fair value | 130,761 | 132,303 |
Fair value measurements on recurring basis | Level III | RMBS | ||
Assets and liabilities measured at fair value | ||
Available-for-sale securities | 197,385 | 207,053 |
Fair value measurements on recurring basis | Level III | CMBS | ||
Assets and liabilities measured at fair value | ||
Available-for-sale securities | $308,195 | $334,080 |
Fair_Value_Details_2
Fair Value (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Total realized and unrealized (losses) gains: | ||
OTTI | ($213) | |
Net accretion | 10,603 | 7,398 |
Level III | ||
Changes in financial assets classified as Level III | ||
Balance at the beginning of the period | 103,988,001 | 102,414,703 |
Total realized and unrealized (losses) gains: | ||
Included in earnings: Change in fair value / gain on sale | -6,367,753 | -3,558,182 |
OTTI | -213 | |
Net accretion | 9,445 | 6,564 |
Included in OCI | -12,842 | 4,215 |
Purchases / Originations | 421,959 | |
Sales | -486,722 | -327,615 |
Issuances | -6,763 | -45,761 |
Cash repayments / receipts | 36,031 | 27,047 |
Transfers into Level III | -192,481 | -524,312 |
Transfers out of Level III | 549,370 | 306,842 |
Consolidations of VIEs | 4,278,227 | 18,439,763 |
Deconsolidations of VIEs | -17,841 | -1,289,214 |
Balance at the end of the period | 102,198,631 | 115,719,493 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | -6,381,085 | -3,573,614 |
VIE liabilities | Level III | ||
Changes in financial liabilities classified as Level III | ||
Balance at the beginning of the period | -4,893,120 | -1,597,984 |
Total realized and unrealized (losses) gains: | ||
Included in earnings: Change in fair value/ gain on sale | 2,460,672 | 101,499 |
Issuances | -6,763 | -45,761 |
Cash repayments / receipts | 47,936 | 35,366 |
Transfers into Level III | -192,481 | -571,612 |
Transfers out of Level III | 549,370 | 419,741 |
Consolidations of VIEs | -111,072 | -1,824,171 |
Balance at the end of the period | -2,145,458 | -3,482,922 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | 2,460,672 | 101,499 |
Loans held-for-sale, fair value option | Level III | ||
Changes in financial assets classified as Level III | ||
Balance at the beginning of the period | 391,620 | 206,672 |
Total realized and unrealized (losses) gains: | ||
Included in earnings: Change in fair value / gain on sale | 21,131 | 20,893 |
Purchases / Originations | 413,221 | |
Sales | -482,009 | -302,461 |
Cash repayments / receipts | -193 | -92 |
Transfers out of Level III | -112,720 | |
Balance at the end of the period | 343,770 | 74,117 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | 4,788 | 177 |
RMBS | Level III | ||
Changes in financial assets classified as Level III | ||
Balance at the beginning of the period | 207,053 | 296,236 |
Total realized and unrealized (losses) gains: | ||
Included in earnings: Change in fair value / gain on sale | 1,011 | |
OTTI | -213 | |
Net accretion | 9,445 | 6,564 |
Included in OCI | -7,626 | 4,748 |
Sales | -9,310 | |
Cash repayments / receipts | -11,487 | -7,819 |
Balance at the end of the period | 197,385 | 291,217 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | 3,952 | 6,295 |
CMBS | Level III | ||
Changes in financial assets classified as Level III | ||
Balance at the beginning of the period | 334,080 | 208,006 |
Total realized and unrealized (losses) gains: | ||
Included in earnings: Change in fair value / gain on sale | -160 | 5,207 |
Included in OCI | -5,216 | -533 |
Purchases / Originations | 8,738 | |
Sales | -4,713 | -15,844 |
Cash repayments / receipts | -225 | -408 |
Transfers into Level III | 47,300 | |
Transfers out of Level III | -179 | |
Consolidations of VIEs | -24,309 | -6,715 |
Balance at the end of the period | 308,195 | 240,665 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | -1,101 | 5,207 |
Domestic Servicing Rights | Level III | ||
Changes in financial assets classified as Level III | ||
Balance at the beginning of the period | 132,303 | 150,149 |
Total realized and unrealized (losses) gains: | ||
Included in earnings: Change in fair value / gain on sale | -1,542 | -5,251 |
Balance at the end of the period | 130,761 | 144,898 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | -1,542 | -5,251 |
VIE Assets | Level III | ||
Changes in financial assets classified as Level III | ||
Balance at the beginning of the period | 107,816,065 | 103,151,624 |
Total realized and unrealized (losses) gains: | ||
Included in earnings: Change in fair value / gain on sale | -8,847,854 | -3,681,541 |
Consolidations of VIEs | 4,413,608 | 20,270,649 |
Deconsolidations of VIEs | -17,841 | -1,289,214 |
Balance at the end of the period | 103,363,978 | 118,451,518 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | ($8,847,854) | ($3,681,541) |
Fair_Value_Details_3
Fair Value (Details 3) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Financial assets not carried at fair value: | ||
Securities, held-to-maturity | $501,686 | $441,995 |
Financial liabilities not carried at fair value: | ||
Convertible senior notes | 1,324,125 | 1,418,022 |
Carrying Value | ||
Financial assets not carried at fair value: | ||
Loans held-for-investment and loans transferred as secured borrowings | 6,135,825 | 5,908,665 |
Securities, held-to-maturity | 501,686 | 441,995 |
European servicing rights | 8,041 | 11,849 |
Financial liabilities not carried at fair value: | ||
Secured financing agreements and secured borrowings on transferred loans | 3,806,834 | 3,267,230 |
Convertible senior notes | 1,324,125 | 1,418,022 |
Fair Value. | ||
Financial assets not carried at fair value: | ||
Loans held-for-investment and loans transferred as secured borrowings | 6,258,516 | 6,034,838 |
Securities, held-to-maturity | 499,255 | 440,629 |
European servicing rights | 11,205 | 12,741 |
Financial liabilities not carried at fair value: | ||
Secured financing agreements and secured borrowings on transferred loans | 3,799,857 | 3,251,035 |
Convertible senior notes | $1,354,314 | $1,444,975 |
Fair_Value_Details_4
Fair Value (Details 4) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Carrying Value | $111,980,814 | 116,099,297 |
Fair value measurements on recurring basis | Level III | Loans held-for-sale, fair value option | Discounted cash flow | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Carrying Value | 343,770 | |
Fair value measurements on recurring basis | Level III | Loans held-for-sale, fair value option | Discounted cash flow | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Yield (as a percent) | 4.00% | |
Duration | 5 years | |
Fair value measurements on recurring basis | Level III | Loans held-for-sale, fair value option | Discounted cash flow | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Yield (as a percent) | 4.50% | |
Duration | 11 years | |
Fair value measurements on recurring basis | Level III | RMBS | Discounted cash flow | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Carrying Value | 197,385 | |
Portfolio percentage | 82.00% | 85.00% |
Fair value measurements on recurring basis | Level III | RMBS | Discounted cash flow | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Constant prepayment rate (as a percent) | 3.30% | |
Constant default rate (as a percent) | 1.10% | |
Loss severity (as a percent) | 15.00% | |
Delinquency rate (as a percent) | 2.00% | |
Servicer advances (as a percent) | 31.00% | |
Annual coupon deterioration (as a percent) | 0.00% | |
Putback amount per projected total collateral loss (as a percent) | 0.00% | |
Loss severity for specified percentage of portfolio (as a percent) | 45.00% | |
Fair value measurements on recurring basis | Level III | RMBS | Discounted cash flow | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Constant prepayment rate (as a percent) | 15.30% | |
Constant default rate (as a percent) | 9.00% | |
Loss severity (as a percent) | 81.00% | |
Delinquency rate (as a percent) | 31.00% | |
Servicer advances (as a percent) | 88.00% | |
Annual coupon deterioration (as a percent) | 0.50% | |
Putback amount per projected total collateral loss (as a percent) | 16.00% | |
Loss severity for specified percentage of portfolio (as a percent) | 80.00% | |
Fair value measurements on recurring basis | Level III | CMBS | Discounted cash flow | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Carrying Value | 308,195 | |
Fair value measurements on recurring basis | Level III | CMBS | Discounted cash flow | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Yield (as a percent) | 0.00% | |
Duration | 0 years | |
Fair value measurements on recurring basis | Level III | CMBS | Discounted cash flow | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Yield (as a percent) | 240.80% | |
Duration | 13 years 8 months 12 days | |
Fair value measurements on recurring basis | Level III | Domestic Servicing Rights | Discounted cash flow | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Carrying Value | 130,761 | |
Yield (as a percent) | 8.25% | 8.25% |
Discount rate (as a percent) | 15.00% | 15.00% |
Fair value measurements on recurring basis | Level III | Domestic Servicing Rights | Discounted cash flow | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Control migration (as a percent) | 0.00% | |
Fair value measurements on recurring basis | Level III | Domestic Servicing Rights | Discounted cash flow | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Control migration (as a percent) | 80.00% | |
Fair value measurements on recurring basis | Level III | VIE Assets | Discounted cash flow | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Carrying Value | $103,363,978 | |
Fair value measurements on recurring basis | Level III | VIE Assets | Discounted cash flow | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Yield (as a percent) | 0.00% | |
Duration | 0 years | |
Fair value measurements on recurring basis | Level III | VIE Assets | Discounted cash flow | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ||
Yield (as a percent) | 910.10% | |
Duration | 20 years 1 month 6 days |
Fair_Value_Details_5
Fair Value (Details 5) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Carrying Value | 108,100,698 | $112,216,385 |
Fair value measurements on recurring basis | Level III | VIE liabilities | Discounted cash flow | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Carrying Value | 2,145,458 | |
Fair value measurements on recurring basis | Level III | VIE liabilities | Discounted cash flow | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Yield (as a percent) | 0.00% | |
Duration | 0 years | |
Fair value measurements on recurring basis | Level III | VIE liabilities | Discounted cash flow | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Yield (as a percent) | 910.10% | |
Duration | 20 years 1 month 6 days |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Current | ||||
Federal | $11,506 | $5,140 | ||
Foreign | 1,036 | 1,449 | ||
State | 1,955 | 870 | ||
Total current | 14,497 | 7,459 | ||
Deferred | ||||
Federal | 1,959 | -704 | ||
Foreign | -789 | -1,006 | ||
State | 284 | -129 | ||
Total deferred | 1,454 | -1,839 | ||
Total income tax provision | 15,951 | 5,620 | ||
Income Taxes | ||||
Assets owned | 111,980,814 | 116,099,297 | ||
Cash | 360,720 | 226,471 | 255,187 | 317,627 |
Deferred tax assets and liabilities | ||||
Net deferred tax assets (liabilities) | 18,627 | 19,915 | ||
U.S. | ||||
Deferred tax assets and liabilities | ||||
Reserves and accruals | 11,563 | 13,818 | ||
Domestic intangible assets | 8,963 | 9,617 | ||
Investment securities and loans | -2,394 | -2,327 | ||
Investment in unconsolidated entities | 1,436 | 883 | ||
Deferred income | 433 | 427 | ||
Net operating and capital loss carryforwards | 3,753 | 2,498 | ||
Valuation allowance | -3,753 | -2,498 | ||
Other temporary differences (asset) | 689 | 515 | ||
Net deferred tax assets | 20,690 | 22,933 | ||
Europe | ||||
Deferred tax assets and liabilities | ||||
European servicing rights | -1,801 | -2,681 | ||
Net operating and capital loss carryforwards | 7,867 | 8,702 | ||
Valuation allowance | -7,867 | -8,702 | ||
Other temporary differences (liability) | -262 | -337 | ||
Net deferred tax liabilities | -2,063 | -3,018 | ||
Investment and Servicing | TRS entities | ||||
Income Taxes | ||||
Assets owned | 1,000,000 | 1,000,000 | ||
Cash | $152,300 | $88,600 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reconciliation of statutory tax to effective tax | ||
Federal statutory tax rate | $47,856 | $44,275 |
REIT and other non-taxable income | -34,972 | -40,382 |
State income taxes | 2,001 | 450 |
Federal benefit of state tax deduction | -700 | -158 |
Valuation allowance | 1,255 | 1,512 |
Other | 511 | -77 |
Total income tax provision | $15,951 | $5,620 |
Reconciliation of statutory tax rate to effective tax rate | ||
Federal statutory tax rate (as a percent) | 35.00% | 35.00% |
REIT and other non-taxable income (as a percent) | -25.60% | -32.00% |
State income taxes (as a percent) | 1.50% | 0.40% |
Federal benefit of state tax deduction (as a percent) | -0.50% | -0.10% |
Valuation allowance (as a percent) | 0.90% | 1.20% |
Other (as a percent) | 0.40% | -0.10% |
Effective tax rate (as a percent) | 11.70% | 4.40% |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Commitments, USD $) | Mar. 31, 2015 |
In Billions, unless otherwise specified | loan |
Commitments | |
Operating leases | |
Number of loans with future funding commitments | 58 |
Value of loans with future funding commitments | $2 |
Value of loans with future funding commitments expected to fund | $1.70 |
Segment_Data_Details
Segment Data (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Interest income from loans | $118,429 | $104,910 |
Interest income from investment securities | 27,744 | 29,454 |
Servicing fees | 28,257 | 34,211 |
Other revenues | 4,419 | 3,404 |
Total revenues | 178,849 | 171,979 |
Costs and expenses: | ||
Management fees | 27,968 | 27,821 |
Interest expense | 50,534 | 37,831 |
General and administrative | 35,264 | 46,101 |
Acquisition and investment pursuit costs | 1,186 | 394 |
Depreciation and amortization | 4,085 | 4,636 |
Loan loss allowance, net | 317 | 497 |
Other expense | 2,073 | 1,689 |
Total costs and expenses | 121,427 | 118,969 |
Income before other income, income taxes and non-controlling interests | 57,422 | 53,010 |
Other income: | ||
Income of consolidated VIEs, net | 47,861 | 56,004 |
Change in fair value of servicing rights | -1,542 | -5,251 |
Change in fair value of investment securities, net | -499 | 8,361 |
Change in fair value of mortgage loans held-for-sale, net | 21,131 | 20,893 |
Earnings from unconsolidated entities | 6,090 | 64 |
Gain on sale of investments, net | 17,198 | 1,555 |
Gain (loss) on derivative financial instruments, net | 24,623 | -7,866 |
Foreign currency (loss) gain, net | -30,307 | 1,477 |
OTTI | -213 | |
Loss on extinguishment of debt | -5,292 | |
Other (expense) income, net | 45 | 18 |
Total other income | 79,308 | 75,042 |
Income from continuing operations before income taxes | 136,730 | 128,052 |
Income tax benefit (provision) | -15,951 | -5,620 |
Income from continuing operations | 120,779 | 122,432 |
Loss from discontinued operations, net of tax | -1,551 | |
Net income | 120,779 | 120,881 |
Net income attributable to non-controlling interests | -416 | -280 |
Net income (loss) attributable to Starwood Property Trust, Inc. | 120,363 | 120,601 |
Operating Segments and Corporate | ||
Revenues: | ||
Interest income from loans | 118,429 | 104,910 |
Interest income from investment securities | 46,992 | 41,297 |
Servicing fees | 51,032 | 56,222 |
Other revenues | 4,681 | 3,677 |
Total revenues | 221,134 | 206,106 |
Costs and expenses: | ||
Management fees | 27,918 | 27,783 |
Interest expense | 50,534 | 37,831 |
General and administrative | 35,078 | 45,915 |
Acquisition and investment pursuit costs | 1,186 | 394 |
Depreciation and amortization | 4,085 | 4,636 |
Loan loss allowance, net | 317 | 497 |
Other expense | 2,073 | 1,689 |
Total costs and expenses | 121,191 | 118,745 |
Income before other income, income taxes and non-controlling interests | 99,943 | 87,361 |
Other income: | ||
Change in fair value of servicing rights | -4,875 | -12,175 |
Change in fair value of investment securities, net | 7,974 | 36,796 |
Change in fair value of mortgage loans held-for-sale, net | 21,131 | 20,893 |
Earnings from unconsolidated entities | 6,220 | 157 |
Gain on sale of investments, net | 17,198 | 1,555 |
Gain (loss) on derivative financial instruments, net | 24,623 | -7,866 |
Foreign currency (loss) gain, net | -30,307 | 1,477 |
OTTI | -213 | |
Loss on extinguishment of debt | -5,292 | |
Other (expense) income, net | 45 | 18 |
Total other income | 36,717 | 40,642 |
Income from continuing operations before income taxes | 136,660 | 128,003 |
Income tax benefit (provision) | -15,951 | -5,620 |
Income from continuing operations | 122,383 | |
Loss from discontinued operations, net of tax | -1,551 | |
Net income | 120,709 | 120,832 |
Net income attributable to non-controlling interests | -346 | -231 |
Net income (loss) attributable to Starwood Property Trust, Inc. | 120,363 | 120,601 |
Operating segment | Real Estate Investment Lending | ||
Revenues: | ||
Interest income from loans | 113,472 | 102,087 |
Interest income from investment securities | 22,296 | 18,289 |
Servicing fees | 84 | 37 |
Other revenues | 79 | 80 |
Total revenues | 135,931 | 120,493 |
Costs and expenses: | ||
Management fees | 388 | 627 |
Interest expense | 21,523 | 15,826 |
General and administrative | 4,860 | 5,145 |
Acquisition and investment pursuit costs | 773 | 212 |
Loan loss allowance, net | 317 | 497 |
Other expense | -14 | |
Total costs and expenses | 27,861 | 22,293 |
Income before other income, income taxes and non-controlling interests | 108,070 | 98,200 |
Other income: | ||
Change in fair value of investment securities, net | -339 | -156 |
Earnings from unconsolidated entities | 3,496 | 1,540 |
Gain on sale of investments, net | 98 | 1,555 |
Gain (loss) on derivative financial instruments, net | 32,630 | -2,788 |
Foreign currency (loss) gain, net | -29,136 | 1,561 |
OTTI | -213 | |
Other (expense) income, net | 18 | |
Total other income | 6,749 | 1,517 |
Income from continuing operations before income taxes | 114,819 | 99,717 |
Income tax benefit (provision) | 30 | -83 |
Income from continuing operations | 99,634 | |
Net income | 114,849 | 99,634 |
Net income attributable to non-controlling interests | -346 | -231 |
Net income (loss) attributable to Starwood Property Trust, Inc. | 114,503 | 99,403 |
Operating segment | Investment and Servicing | ||
Revenues: | ||
Interest income from loans | 4,957 | 2,823 |
Interest income from investment securities | 24,696 | 23,008 |
Servicing fees | 50,948 | 56,185 |
Other revenues | 4,602 | 3,597 |
Total revenues | 85,203 | 85,613 |
Costs and expenses: | ||
Management fees | 18 | 18 |
Interest expense | 2,119 | 951 |
General and administrative | 29,189 | 39,349 |
Acquisition and investment pursuit costs | 213 | 182 |
Depreciation and amortization | 4,085 | 4,636 |
Other expense | 2,073 | 1,703 |
Total costs and expenses | 37,697 | 46,839 |
Income before other income, income taxes and non-controlling interests | 47,506 | 38,774 |
Other income: | ||
Change in fair value of servicing rights | -4,875 | -12,175 |
Change in fair value of investment securities, net | 8,313 | 36,952 |
Change in fair value of mortgage loans held-for-sale, net | 21,131 | 20,893 |
Earnings from unconsolidated entities | 2,724 | -1,383 |
Gain on sale of investments, net | 17,100 | |
Gain (loss) on derivative financial instruments, net | -8,007 | -5,078 |
Foreign currency (loss) gain, net | -1,171 | -84 |
Other (expense) income, net | 31 | |
Total other income | 35,246 | 39,125 |
Income from continuing operations before income taxes | 82,752 | 77,899 |
Income tax benefit (provision) | -15,981 | -5,537 |
Income from continuing operations | 72,362 | |
Net income | 66,771 | 72,362 |
Net income (loss) attributable to Starwood Property Trust, Inc. | 66,771 | 72,362 |
Operating segment | Single Family Residential | ||
Other income: | ||
Loss from discontinued operations, net of tax | -1,551 | |
Net income | -1,551 | |
Net income (loss) attributable to Starwood Property Trust, Inc. | -1,551 | |
Corporate | ||
Costs and expenses: | ||
Management fees | 27,512 | 27,138 |
Interest expense | 26,892 | 21,054 |
General and administrative | 1,029 | 1,421 |
Acquisition and investment pursuit costs | 200 | |
Total costs and expenses | 55,633 | 49,613 |
Income before other income, income taxes and non-controlling interests | -55,633 | -49,613 |
Other income: | ||
Loss on extinguishment of debt | -5,292 | |
Other (expense) income, net | 14 | |
Total other income | -5,278 | |
Income from continuing operations before income taxes | -60,911 | -49,613 |
Income from continuing operations | -49,613 | |
Net income | -60,911 | -49,613 |
Net income (loss) attributable to Starwood Property Trust, Inc. | -60,911 | -49,613 |
Investment and Servicing VIEs | ||
Revenues: | ||
Interest income from investment securities | -19,248 | -11,843 |
Servicing fees | -22,775 | -22,011 |
Other revenues | -262 | -273 |
Total revenues | -42,285 | -34,127 |
Costs and expenses: | ||
Management fees | 50 | 38 |
General and administrative | 186 | 186 |
Total costs and expenses | 236 | 224 |
Income before other income, income taxes and non-controlling interests | -42,521 | -34,351 |
Other income: | ||
Income of consolidated VIEs, net | 47,861 | 56,004 |
Change in fair value of servicing rights | 3,333 | 6,924 |
Change in fair value of investment securities, net | -8,473 | -28,435 |
Earnings from unconsolidated entities | -130 | -93 |
Total other income | 42,591 | 34,400 |
Income from continuing operations before income taxes | 70 | 49 |
Income from continuing operations | 49 | |
Net income | 70 | 49 |
Net income attributable to non-controlling interests | ($70) | ($49) |
Segment_Data_Details_2
Segment Data (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||||
Assets: | ||||
Cash and cash equivalents | $360,720 | $255,187 | $226,471 | $317,627 |
Restricted cash | 39,568 | 48,704 | ||
Loans held-for-investment, net | 6,040,825 | 5,779,238 | ||
Loans held-for-sale | 343,770 | 391,620 | ||
Loans transferred as secured borrowings | 95,000 | 129,427 | ||
Investment securities | 1,021,311 | 998,248 | ||
Intangible assets - servicing rights | 138,802 | 144,152 | 168,056 | |
Investment in unconsolidated entities | 209,833 | 193,983 | ||
Goodwill | 140,437 | 140,437 | ||
Derivative assets | 58,601 | 26,628 | ||
Accrued interest receivable | 39,121 | 40,102 | ||
Other assets | 128,848 | 135,506 | ||
VIE assets, at fair value | 103,363,978 | 107,816,065 | ||
Total Assets | 111,980,814 | 116,099,297 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 112,954 | 144,516 | ||
Related-party payable | 27,673 | 40,751 | ||
Dividends payable | 108,435 | 108,189 | 95,424 | |
Derivative liabilities | 11,945 | 5,476 | ||
Secured financing agreements, net | 3,711,834 | 3,137,789 | ||
Convertible senior notes, net | 1,324,125 | 1,418,022 | ||
Secured borrowings on transferred loans | 95,000 | 129,441 | ||
VIE liabilities, at fair value | 102,708,732 | 107,232,201 | ||
Total Liabilities | 108,100,698 | 112,216,385 | ||
Starwood Property Trust, Inc. Stockholders' Equity: | ||||
Common stock | 2,255 | 2,248 | ||
Additional paid-in capital | 3,837,040 | 3,835,725 | ||
Treasury stock | -23,635 | -23,635 | ||
Accumulated other comprehensive income | 39,362 | 55,896 | 80,115 | 75,449 |
Retained earnings (accumulated deficit) | 2,550 | -9,378 | ||
Total Starwood Property Trust, Inc. Stockholders' Equity | 3,857,572 | 3,860,856 | ||
Non-controlling interests in consolidated subsidiaries | 22,544 | 22,056 | ||
Total Equity | 3,880,116 | 3,882,912 | 3,215,647 | 4,327,133 |
Total Liabilities and Equity | 111,980,814 | 116,099,297 | ||
Operating Segments and Corporate | ||||
Assets: | ||||
Cash and cash equivalents | 360,065 | 254,401 | ||
Restricted cash | 39,568 | 48,704 | ||
Loans held-for-investment, net | 6,040,825 | 5,779,238 | ||
Loans held-for-sale | 343,770 | 391,620 | ||
Loans transferred as secured borrowings | 95,000 | 129,427 | ||
Investment securities | 1,614,901 | 1,518,070 | ||
Intangible assets - servicing rights | 181,524 | 190,207 | ||
Investment in unconsolidated entities | 216,685 | 200,705 | ||
Goodwill | 140,437 | 140,437 | ||
Derivative assets | 58,601 | 26,628 | ||
Accrued interest receivable | 39,121 | 40,102 | ||
Other assets | 130,459 | 136,970 | ||
Total Assets | 9,260,956 | 8,856,509 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 112,459 | 144,059 | ||
Related-party payable | 27,673 | 40,751 | ||
Dividends payable | 108,435 | 108,189 | ||
Derivative liabilities | 11,945 | 5,476 | ||
Secured financing agreements, net | 3,711,834 | 3,137,789 | ||
Convertible senior notes, net | 1,324,125 | 1,418,022 | ||
Secured borrowings on transferred loans | 95,000 | 129,441 | ||
Total Liabilities | 5,391,471 | 4,983,727 | ||
Starwood Property Trust, Inc. Stockholders' Equity: | ||||
Common stock | 2,255 | 2,248 | ||
Additional paid-in capital | 3,837,040 | 3,835,725 | ||
Treasury stock | -23,635 | -23,635 | ||
Accumulated other comprehensive income | 39,362 | 55,896 | ||
Retained earnings (accumulated deficit) | 2,550 | -9,378 | ||
Total Starwood Property Trust, Inc. Stockholders' Equity | 3,857,572 | 3,860,856 | ||
Non-controlling interests in consolidated subsidiaries | 11,913 | 11,926 | ||
Total Equity | 3,869,485 | 3,872,782 | ||
Total Liabilities and Equity | 9,260,956 | 8,856,509 | ||
Operating segment | Real Estate Investment Lending | ||||
Assets: | ||||
Cash and cash equivalents | 94,136 | 125,132 | ||
Restricted cash | 20,232 | 34,941 | ||
Loans held-for-investment, net | 6,037,731 | 5,771,307 | ||
Loans transferred as secured borrowings | 95,000 | 129,427 | ||
Investment securities | 808,025 | 764,517 | ||
Investment in unconsolidated entities | 165,830 | 152,012 | ||
Derivative assets | 54,812 | 23,579 | ||
Accrued interest receivable | 38,050 | 39,188 | ||
Other assets | 38,081 | 21,329 | ||
Total Assets | 7,351,897 | 7,061,432 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 19,210 | 23,014 | ||
Dividends payable | 1 | |||
Derivative liabilities | 7,128 | 3,662 | ||
Secured financing agreements, net | 2,665,075 | 2,252,493 | ||
Secured borrowings on transferred loans | 95,000 | 129,441 | ||
Total Liabilities | 2,786,413 | 2,408,611 | ||
Starwood Property Trust, Inc. Stockholders' Equity: | ||||
Additional paid-in capital | 3,042,637 | 3,254,144 | ||
Accumulated other comprehensive income | 42,676 | 55,781 | ||
Retained earnings (accumulated deficit) | 1,468,258 | 1,330,970 | ||
Total Starwood Property Trust, Inc. Stockholders' Equity | 4,553,571 | 4,640,895 | ||
Non-controlling interests in consolidated subsidiaries | 11,913 | 11,926 | ||
Total Equity | 4,565,484 | 4,652,821 | ||
Total Liabilities and Equity | 7,351,897 | 7,061,432 | ||
Operating segment | Investment and Servicing | ||||
Assets: | ||||
Cash and cash equivalents | 142,976 | 85,252 | ||
Restricted cash | 19,336 | 13,763 | ||
Loans held-for-investment, net | 3,094 | 7,931 | ||
Loans held-for-sale | 343,770 | 391,620 | ||
Investment securities | 806,876 | 753,553 | ||
Intangible assets - servicing rights | 181,524 | 190,207 | ||
Investment in unconsolidated entities | 50,855 | 48,693 | ||
Goodwill | 140,437 | 140,437 | ||
Derivative assets | 3,789 | 3,049 | ||
Accrued interest receivable | 1,071 | 914 | ||
Other assets | 78,512 | 100,902 | ||
Total Assets | 1,772,240 | 1,736,321 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 77,386 | 97,424 | ||
Related-party payable | 3,562 | 4,405 | ||
Derivative liabilities | 4,817 | 1,814 | ||
Secured financing agreements, net | 385,417 | 222,363 | ||
Total Liabilities | 471,182 | 326,006 | ||
Starwood Property Trust, Inc. Stockholders' Equity: | ||||
Additional paid-in capital | 1,263,796 | 1,413,608 | ||
Accumulated other comprehensive income | -3,314 | 115 | ||
Retained earnings (accumulated deficit) | 40,576 | -3,408 | ||
Total Starwood Property Trust, Inc. Stockholders' Equity | 1,301,058 | 1,410,315 | ||
Total Equity | 1,301,058 | 1,410,315 | ||
Total Liabilities and Equity | 1,772,240 | 1,736,321 | ||
Corporate | ||||
Assets: | ||||
Cash and cash equivalents | 122,953 | 44,017 | ||
Other assets | 13,866 | 14,739 | ||
Total Assets | 136,819 | 58,756 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 15,863 | 23,621 | ||
Related-party payable | 24,111 | 36,346 | ||
Dividends payable | 108,435 | 108,188 | ||
Secured financing agreements, net | 661,342 | 662,933 | ||
Convertible senior notes, net | 1,324,125 | 1,418,022 | ||
Total Liabilities | 2,133,876 | 2,249,110 | ||
Starwood Property Trust, Inc. Stockholders' Equity: | ||||
Common stock | 2,255 | 2,248 | ||
Additional paid-in capital | -469,393 | -832,027 | ||
Treasury stock | -23,635 | -23,635 | ||
Retained earnings (accumulated deficit) | -1,506,284 | -1,336,940 | ||
Total Starwood Property Trust, Inc. Stockholders' Equity | -1,997,057 | -2,190,354 | ||
Total Equity | -1,997,057 | -2,190,354 | ||
Total Liabilities and Equity | 136,819 | 58,756 | ||
Investment and Servicing VIEs | ||||
Assets: | ||||
Cash and cash equivalents | 655 | 786 | ||
Investment securities | -593,590 | -519,822 | ||
Intangible assets - servicing rights | -42,722 | -46,055 | ||
Investment in unconsolidated entities | -6,852 | -6,722 | ||
Other assets | -1,611 | -1,464 | ||
VIE assets, at fair value | 103,363,978 | 107,816,065 | ||
Total Assets | 102,719,858 | 107,242,788 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 495 | 457 | ||
VIE liabilities, at fair value | 102,708,732 | 107,232,201 | ||
Total Liabilities | 102,709,227 | 107,232,658 | ||
Starwood Property Trust, Inc. Stockholders' Equity: | ||||
Non-controlling interests in consolidated subsidiaries | 10,631 | 10,130 | ||
Total Equity | 10,631 | 10,130 | ||
Total Liabilities and Equity | $102,719,858 | $107,242,788 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
In Thousands, except Share data in Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Apr. 11, 2014 | 5-May-15 |
Subsequent Events | ||||
Gross proceeds from issuance of common stock | $55 | |||
Dividend declared (in dollars per share) | $0.48 | $0.48 | ||
Public offering | ||||
Subsequent Events | ||||
Shares issued | 12 | |||
Underwriters option | ||||
Subsequent Events | ||||
Optional period of time for underwriters to purchase additional shares of common sock | 30 days | |||
Subsequent event | ||||
Subsequent Events | ||||
Dividend declared (in dollars per share) | $0.48 | |||
Subsequent event | Public offering | ||||
Subsequent Events | ||||
Gross proceeds from issuance of common stock | 283,600 | |||
Subsequent event | Underwriters option | ||||
Subsequent Events | ||||
Shares issued | 1.8 | |||
Gross proceeds from issuance of common stock | 42,500 |